Cliffe says the financial crisis shows the dangers of borrowing too much. In the first instalment of a new 10 video series for eZonomics, Cliffe outlines his personal view.
Leverage cuts both ways
Cliffe argues investors should be wary of borrowing and issues a warning that very low interest rates seen in many places in the financial crisis will not last. He outlines the way leverage works and says: “The problem is that leverage cuts both ways. Just as borrowing can multiply your gains, so it multiplies your losses.”