Margin financing, friend or foe?

EVERY week before I choose a topic to write, I weigh between the topics I enjoy writing versus an urgent need to address a pertinent issue in the realm of economics, finance or policies. After much thought, I decided to focus on this issue as it would be a great disservice if I do not use this column to raise awareness on the pitfalls of margin financing for retail investors.

What prompted me to do so is because a renowned investor blogger recently strongly encouraged retail investors to take up margin financing to invest in a steel trading small cap company called AYS Ventures Bhd. He cited his optimism in the company’s prospects as well as his past success and experience as a founder of several listed company.