Quote:
Originally Posted by Finner
Sorry if i wrote it wrong. Of course you can fall into a margin call if the price drops. I was just trying to say you always "should" have enough equity in your account to cover any margin call unless of course your securities fall by more then 30%.
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Exactly, any investment whether stocks or real estate you should have a proportionate amount of cash available in a savings account/money market fund for emergencies or if you foresee a good time to buy/sell.
As much as it protects you in a downturn, it's just as bad seeing a buying opportunity and having all your money tied in other investments. Stocks are liquid which is not as bad but real estate can take days/months to sell to free up cash.