Montier's 7 laws of investing: Leverage kills
Moneylife Digital Team 14 July 2011

Borrowing money to buy stocks is the road to ruin

Leverage—using debt to finance assets—is a double-edged sword, especially if you finance risky assets like stocks. When it goes in your favour, your profits accelerate. But, when you lose money, your losses are magnified. The outcome of leverage depends on how it is being used. In the hands of all but the most skilled investors, it is a tool...

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