How to Invest Home Equity in Stocks

Video Transcript

"Hi, this is Matt McKillen with Innovative Financial Group. The question I got posed to me today was, "How do you invest a home equity loan proceeds into stocks?" First off it's kind of a double edge question, I'm not a financial planner and I do not do tax or stock advice or securities advice for my clients. My experience in how volatile the stock market has been these last couple of years is that I would never recommend the client to use their home equity; which is basically your home like the, the equity, the cash in your home distributed out to put it into something as volatile as a stock market. I have had people take proceeds of their home equity loan and put it into an IRA or a fixed annuity or into a CD or money market just so that they can have that cash available, but it's setting in a very safe environment earning interest. I've never had a problem with any of my clients doing that. But as far as actually taking proceeds from your home or equity from your home, from a home equity line of credit and investing in a stock market, I think that's a very, very, very risky option for someone to undertake. And I think if they did talk to their financial planner or CPA, they would also agree with me that it really does not make a lot of sense to, to use your home equity for that purpose. Again, my name is Matt McKillen. I'm with Innovative Financial Group."