Playbook Of An Investor

Leveraging, like politics, is the art of the possible. In the realm of investments, it is a craft that can separate success from failure. Used efficiently, it can be a nifty tool in the hands of an investor. However, if used clumsily, it can destroy value and lead to financial ruin. Leveraging, therefore, is almost akin to fire – a good servant but a bad master. In simple words, leveraging is the technique of creating a secondary asset on the strength of the primary one, held by an investor. It has a trail of merits and demerits; the former is beneficial for those who are bold enough to explore the depths of the market. The smartest risk-takers are the ones who have leveraged their holdings cost-effectively for significant gains. The art of leveraging is often ignored by ordinary investors, who do not know enough about its finer aspects. However, it goes without saying that banks...