How to Use Leverage to Increase Your Portfolio Returns

Want to increase the potential profit on your investment portfolio? 

What would happen if you could use disproportionate strength to increase your portfolio’s profits? Then you would be using a strategy called “leverage” or “margin.”

In today’s show, Doug, and his son Efraim, talk about the pros and cons of investing using a leveraged strategy. When an investor decides to invest on margin, he is actually borrowing money from his broker in order to have a larger sum of money to invest. That way, if the stock goes up, he makes a larger percentage, and ultimately walks away with a larger sum of money. 

If all goes well, an investor can make a lot of money. But, if the market goes down, one can find himself losing more money faster... 

Listen to understand why a “long-term investor” needs to understand what a “margin call” is and why this may not be the best strategy for long-term investments. Don’t wake up one day to find out that your brokerage firm sold out your portfolio.

Efraim is a business student, former IDF officer, and an entrepreneur, head of “A Day with an Officer.” Contact him at: efraim@goldstein.co.il