Highest Return Investments Always Require Leverage
He Who Knows Leverage Wins
You will come to find the highest yield investments inevitably come in the form of small gains either massively amplified by leverage, or repeated hyper-rapidly by automatic trading programs. If you’re fortunate enough to own one of those programs, great. If not, you need to learn about leverage.
I am always looking for the highest return investments – whether I am looking to invest my money, my time, or anything else. I always want to know where to get the most bang for my buck – and when it comes to investments… I usually find it.
The More Purchasing Power You Wield, the Bigger Your Gains
The highest return investments in the financial world always involve leverage. Whether an investor chooses to go with options, stocks, bonds, treasuries, or forex – the biggest winner in any trade will always have the biggest lever. The reason this is true is because investing is a percentage game – the larger your purchasing power, the more income you will produce from the same percentage gain. Multiply your purchasing power, and you multiply the gains (and losses). Consider:
Person A with $10000 invests in company A, which gains 10%, producing $1000 profit.
Person B with $10000 buys $20000 of company A stock (on margin) which gains 10% producing a $2000 profit (20% return on Person B’s initial $10000). This would be considered a 2:1 leverage ratio. Person B has bought 50% of his investment on margin (with borrowed funds).
What Trading Systems Offer the Biggest Leverage?
The next most obvious question should be – if the highest return investments involve margin accounts, where can I get the biggest lever to use on my investing capital? The maximum leverage for any type of security is found in forex (foreign currency) trading. Leverage ratios can reach 200:1, although in truth most traders do not venture into that level of risk. After all, anyone involved in investing knows the highest return investments carry a significant amount of downside risk if things go wrong.
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Patient Margin Forex Traders Make Big Profits for Short Investments
That is why the margin forex trader has to have some level of patience to wait until all controllable risks in a trade are in his or her favor before applying a huge amount of leverage to the trade.
People looking for the highest return investments use forex margin accounts, where even relatively low capital investors can get a 200:1 leverage ratio, which provides immense buying power in the market.
One alternative way to make high yields short term is to get an account at a commission free binary options broker (like this one here), where investors can make over 60% return hourly.
