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Don't Bet the House on a Market Recovery

05/02/08 - 12:14 PM EDT

Peter McDougall

So unless you have reserve funds that can cover the added loan obligations, the risks associated with using equity to buy stocks are just too high.

When you invest in the market with spare cash, you only stand to lose the principal if that investment goes bust. If you invest money that you borrow using your home as collateral, you stand to lose both the borrowed money and your home.




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Peter McDougall is a free-lance financial reporter in Freeport, Me.

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