Investing on margin has become more popular throughout the years. Why is this? It is simply because investing on margin is alluring to many because of the chance to amplify your gains.
In the past, investing on margin has often become the most popular right before a bear market or a bubble bursting period in the equities market. The NYSE provides some very interesting data on margin debt on their website. Here you can view just how much margin debt has been in the securities market at any given time all the way from 1950 to now. Interestingly, when looking at the margin debt we see that margin debt grew rapidly through 1999 and 2000, before the internet bubble. Then from about late 2001 to 2003, the margin debt level stayed lower since so 
many people were hurt my margins in the internet bubble. Now, in 2006 and 2007 thus far margin debt has grown rapidly, and we now have the largest dollar amount of margin debt there has been on the NYSE.
The thrill of possibly enhancing your return greatly is what makes a large amount of people turn to margin investing. Why should you not turn to margin investing? There are several very good reasons. First of all, it really makes no sense financially to borrow money to buy equities. When you borrow money, you must pay that money back, and if equities do poorly in that short window, you can be hurt severely. Simply put, there is no margin for error when using margins (no pun intended). When your stocks go down to a certain level and trading on margin you will receive a margin call, requiring you to put down additional cash very quickly. If you are unable to do this your broker will automatically sell some of your equities to generate those funds.
Margin trading is usually investors trading with money that they cannot afford to lose. This is a top rule in investing, only invest what you can afford to lose. The stock market returns a good percentage over time, but no one knows what it will do over a short period. Just about the time you buy that "sure thing" stock on margin it could turn out to be the next Enron or Worldcom.
I highly suggest staying away from borrowing money to buy or sell stocks. If you want to invest on margin and you can afford to lose that money, it is still a highly risky proposition. If you cannot afford to lose all of that money, simply stay away from it. Invest what you can at that time, add to it as you go, and watch your funds grow.
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