Menu

Updated

Can I sell investments while I have an outstanding balance in my Portfolio Line of Credit?

Yes, you can sell investments in the account associated with your Portfolio Line of Credit as long as you maintain sufficient equity.

As long as the following equation is satisfied, you can withdraw funds from your investment account:

Example

In the following example, the withdrawal would be allowed because the client maintains sufficient equity even after selling investments.

 

 

Before Withdrawal

After

Withdrawal

Account Balance

$200,000

$130,000

Outstanding Line of Credit Balance

$30,000

$30,000

Equity %

85%

77%

     

Withdrawal Amount

-$70,000

 

All investing involves risk, including the loss of your principal investment(s), and past performance does not guarantee future results. Margin lending can add to these risks, and investors should carefully review those risks as part of their overall financial strategy. Diversification strategies do not guarantee a profit or protect against loss in declining markets. Learn more about Portfolio Line of Credit in the Margin Handbook.

Financial advisory services are offered by Wealthfront, Inc., an SEC-registered investment adviser. Brokerage products and services are offered by Wealthfront Brokerage Corporation, member FINRA / SIPC, and a wholly-owned subsidiary of Wealthfront, Inc.

Was this article helpful?