Makes perfect sense to use your bond to finance shares. I have been doing this for years, as I am not a big fan of property as an investment (please guys I don't want to start the ol' property investment debate). It is the equivalent of using derivatives (much cheaper!) but has the advantage that you can hold the position long term. If you borrow against the bond to buy a share, your interest is calculated on the initial purchase price. If you use derivatives, the interest is calculated daily on the total exposure (hence the short term nature). So it is quite conceivable that a good quality bluechip share can generated dividends that will eventually cover your bond repayments. In my case, redefine is generating greater returns (after tax even!) than the portion of bond repayments. Grindrod is getting there and Remgro is about 10% short. The capital growth on each has way outstripped the borrowing costs though. My personal advise, high yield stocks only! Don't go for small caps. You want to mimic a buy-to-let strategy (minus the buying costs, tennant hassles, maintenance, lack of liquidity, blah,blah,blah). The purpose is to get the yields to grow to a point where the bond repayments are covered.