Accounting & Financial Advisory for Individuals & Businesses

Gearing

Gearing is adding borrowed funds to your own to purchase an investment. A well-known form of gearing is the purchase of property using borrowed funds via a mortgage. Investors can also gear into the share market by adding borrowed funds to their own to purchase an investment portfolio.

 

Gearing is typically a strategy used by more sophisticated investors, or those with a high-risk appetite. This is because while returns can be magnified, so too can losses.

 

Gearing may not be suitable for all investors. You should always seek professional advice.

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