Tag Archive | "Leverage"

How to Use Leverage Prudently and Conservatively When Investing


The use of leverage can be devastatingly destructive to one’s portfolio. After all, leverage was what brought so many financial institutions to their knees in the 2007-2009 financial crisis. On a personal/retail side, proper leverage use is important. We look at prudent and conservative leverage practices in this brief article, which is more suitable for more conservative investors who are not quite sold on the idea of leverage.

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The Dangers of Leverage


Although nearly every sales-focused financial planner will push the benefits of leverage as a smart investment strategy, there are some serious risks associated with leveraging. We look at the three most common types of leverage available to investors and discuss their risks in this brief article.

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Leverage – A Gift Or a Curse?


Leverage is an investments technique that is used by investors to increase the profitability of their investments. In this article I will explain what is leverage and how it effects risk and profitability.

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Understanding Leverage


Through the decades, leverage has made it possible for millions of people to own homes that they could not have afforded without securing a loan from a bank. This is the most common example of leverage in the investment world, even though most people probably wouldn’t think of their mortgage as an investment. But since it is employing a relatively small amount of money to control an asset that is worth much, much more than this amount, your home mortgage certainly does qualify as a leveraged investment. Stock options are also leveraged investments, though they have a couple of differences that distinguish them from mortgage loans. Once you understand both of these investments you should have a good handle on leverage per se.

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cXVpY2tpbnZlc3QubmV0L3dwL3dwLWNvbnRlbnQvd29vX3VwbG9hZHMvNC1xLmpwZyI7aTozO3M6NjE6Imh0dHA6Ly9xdWlja2ludmVzdC5uZXQvd3Avd3AtY29udGVudC93b29fdXBsb2Fkcy8zLXFpbG9nby5qcGciO308L2xpPjxsaT48c3Ryb25nPndvb192aWRlb19jYXRlZ29yeTwvc3Ryb25nPiAtIFNlbGVjdCBhIGNhdGVnb3J5OjwvbGk+PC91bD4=