I read with much concern about an increasing number of Singaporeans using low-interest-rate bank loans or credit to load up on stocks (Some retail investors tap cheap cash to buy shares, April 6).

Some investors claim to have done their calculations and deem their actions investments rather than punts.

But there is never a sure-win outcome for any investment, share dealing or similar product.

To take a loan and pump the money into a "sure-win investment" is always risky.

The so-called low interest environment may turn adversely beyond one's control and the high dividend yield is never a guarantee.

If companies were to cancel or reduce the dividend payment in subsequent quarters, the yield may be less than the interest coverage for the loan.

Investors may then need to top up any difference in the loan payment instalment.

While some investors may choose to put their money in blue-chip companies, others may prefer penny stocks.

This may result in some investors taking a higher risk than they can actually bear.

I would urge the banks not to take advantage of the gullibility of these investors or encourage such risky behaviour.

The banks should ensure that the loans are being used for the stated purpose, be it purchase of office equipment or business inventory.

If the investors' share ventures turn into failures, the banks may face more bad debts.

Everyone likes to win, but to do so at the expense of gullible, naive investors is unethical.

Foo Sing Kheng