Borrowing to Invest

FAIR Canada is concerned that leveraged investing (or “borrowing to invest”) is a systemic problem that requires regulatory intervention. We believe Canadian financial consumers are being encouraged to borrow to invest even though this is not a suitable investment strategy for most Canadians. We have expressed our concerns to the relevant governments and regulators and have recommended changes.

FAIR Canada wants consumers to be aware of the risks posed by borrowing to invest. The New Brunswick Securities Commission has issued a ‘Borrowing to Invest’ brochure that we believe is helpful for consumers. FAIR Canada encourages consumers to inform themselves about the risks of leverage and we urge Canadians to avoid borrowing to invest unless they fully understand all the risks.

See the articles below for more information.

There’s no such thing as good debt (Rob Carrick, Globe and Mail, May 10, 2015)

Leveraging Strategies Continue to Harm Investors (FAIR Canada, October 18, 2012)

New Brunswick Securities Commission Alerts Investors to Risks of Borrowing Money to Invest (February 17, 2012)

Leveraging: Where math and emotion are a bad mix (Rob Carrick, Globe and Mail, January 25, 2012)