Leverage
InvestingUsing borrowed money to increase the potential return of an investment, which also amplifies potential losses.
Example
Example: Consider an investor building a $100,000 portfolio. Leverage — using borrowed money to increase the potential return of an investment, which also — directly affects investment strategy and long-term returns. Getting this concept right can mean tens of thousands of dollars in difference over a 20-year period. Model your portfolio with our investment calculator.