Leverage is borrowing money to invest. It can boost your returns in good times and amplify your losses when the market turns against you.
This week we look at the different types of leveraged investments and how to employ them. We discuss the pros and cons of investing with margin loans, leveraged ETFs, and options. And the surprising evidence for using leverage to reduce retirement risk…
And in today’s Dumb Question of the Week: “If your broker sells your stocks in a margin call, can you be left owing more money than you invested?”
- Life-Cycle Investing and Leverage: Buying Stock on Margin Can Reduce Retirement Risk
- Federal Reserve Financial Stability Report: Leverage in the Financial Sector (May 2022)