For those who are unclear, leverage is simply borrowing money from your broker to invest in the stock markets.
People do not typically assume leverage to be defensive in nature. The idea of borrowing money to invest is by nature, assumed to be an aggressive action.
This is true. Leverage is and remains a double-edged sword.
DBS Bank has done a pretty good job of illustrating the benefits of having extra capital.
This is for illustration purposes only and this is not a promotion.
But you must also remember that leverage works both ways: you can both win and lose.
And win or lose, you have to return what you owe to the broker.
So how is a Leveraged Portfolio “defensive”?
#1 Leverage Helps You Increase Your Diversification
For investors with smaller capital sums, it may be frustrating to diversify their investment holdings.
Suppose a rookie DIY yield investor has