Brent, Homer and Richie each have a net worth of zero. Add up their assets, deduct debts: zilch.
1 Brent rents his flat: should he take out a loan to invest in the stock market?
2 Homer has a mortgage. Should he increase his mortgage to invest in the stock market?
3 Richie has a mortgage, and some shares. What should he do?
For the vanilla investor there is only one answer. You don't borrow to buy shares. Ritche should sell his shares and pay off the mortgage.
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