How should you frame the decision?
Think in three lenses: (1) economics—interest vs expected return and taxes; (2) risk—market drawdown impact on loan covenants; (3) flexibility—how quickly you can unwind or refinance. Selling is clean but final for the shares sold. Borrowing keeps you in the market but adds a liability.
How it works
Model a sell scenario: net proceeds after tax and transaction costs. Model a borrow scenario: interest over the planned horizon plus stress LTV if markets fall 20–30%. Compare tail risks: loan default remedies versus opportunity cost of selling before a rebound. Our how it works page outlines the lending process.
Key benefits
- Borrowing may defer gain recognition (not advice—tax rules vary).
- Selling eliminates financing risk and simplifies the balance sheet.
- Global financing can align with multi-currency portfolios when permitted.
Risks or considerations
Borrowing can force sales later at stressed prices if covenants break. Selling cannot be undone at the old cost basis. Both paths deserve professional tax and legal input for large positions.
When this strategy makes sense
- Low-basis concentration — borrowing sometimes enters the conversation (tax counsel required).
- Short-term liquidity wedge — borrow if the window is months, not decades, and carry cost is acceptable.
- Strategic exit plan — selling tranches over time may pair with partial borrowing—custom scenario.