Adding leverage increases your risk, but increased risk is one way to possibly gain better returns. There are many ways to gain leverage, from using loans, to options, to futures. I'll explain how to use all of these methods.
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A fundamental question is how much leverage you want to use. You can easily bankrupt yourself, and unfortunately brokerages make this all too easy. For me, the leverage amount is 1.3. For example, if I have $100k cash, I will use that to invest $130k in a diversified portfolio. The key is diversified, because you want to be able to ride out the downswings.
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A fundamental question is how much leverage you want to use. You can easily bankrupt yourself, and unfortunately brokerages make this all too easy. I prefer the leverage amount of 1.3. For example, if I have $100k cash, I will use that to invest $130k in a diversified portfolio. The key is diversified, because you want to be able to ride out the downswings.