Leveraging (Noun)
Meaning
Investing with borrowed money as a way to amplify potential gains (at the risk of greater losses).
Classification
Nouns denoting acts or actions.
Examples
- Investors who engage in leveraging are essentially using borrowed money to amplify their potential returns, but this strategy also increases their risk exposure.
- The hedge fund's leveraging strategy allowed it to generate impressive returns during the bull market, but it also left the fund vulnerable to significant losses when the market declined.
- By leveraging their investment portfolio, the family office was able to increase its potential returns, but it also had to contend with higher interest payments and greater volatility.
- The private equity firm's decision to use leveraging to finance its latest acquisition has raised concerns among some investors, who worry that the firm is taking on too much debt.
- The investor's leveraging strategy involved using margin loans to buy more stocks, but this approach ultimately backfired when the market plummeted and the investor was forced to sell at a loss.