The implementation of a leveraged investment, through a margin loan allows the investor to benefit from a fast increase of the value of assets as well as of the yield. He will take advantage of it to diversify his traded assets and to decrease his exposure at the financial market risks. This is practicable from capital intended to be invested or from an existing asset portfolio. By the application of the margin loan, a credit line can be obtained and reinvested in other assets. The investor got an asset value superior to the base investment and will appreciate the rise of the yield.

Type of collateral securities for leveraged investments: life insurance policy, mutual fund shares, international bonds, T-Bills, precious metals. An example lies in an international bond investment from EUR30,000 minimum. The bonds, of good ratings (A minimum) are subscribed by the investor with a European bank. The bank will give a credit line equal to one, two, three or four times the bond portfolio value. The loan is used to increase the bond value.

Example of leveraged bond investment:

• Initial investment: EUR 50,000
• Leveraged investment: EUR 130,000 (asset value held in bank)
• Initial yield: 6.0%
• Leveraged new yield: 15.0% (on EUR 50,000)