Show Us Your Portfolio: Adam Butler
Excess Returns
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The Importance of Leverage in a Diverse Portfolio
We impose constraints on our strategies to avoid two high levels of concentration in any one sector, for example. And obviously, we want to avoid major catastrophic outcomes. But prudent leverage while enforcing a minimization of concentration risk in any one market or sector and imposing maximum levels of leverage is the right approach. Being afraid of leverage for leverage's sake means that you're no longer able to take advantage of diversification's free lunch.
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