By Tom Bradley

In a post last month, I gave my not-so-subtle view about borrowing money to invest – it’s possibly appropriate for a miniscule number of investors, and totally inappropriate for the rest.

Last week I heard Cliff Asness speak. Mr. Asness is one of the founders of AQR Capital Management in Greenwich, Connecticut, and is a well-regarded (and noisy) thinker in the investment industry.

As a side note to his talk, he said something that reinforced my view on the borrowing issue:

"In a bear market, there are two people who can panic – the investment manager and the client. For a portfolio that is using leverage, there are three people who can panic – the manager, the client and the lender."

Both Mr. Asness and I think that investing is psychologically hard. Adding leverage makes the degree of difficulty even higher, and as he points out, brings another variable into the mix.

Think hard before you accept your bank’s offer.