REV UP YOUR RETURNS

Borrowing, or gearing, to increase the amount being invested is a way to further enhance returns if the markets go up but it also means increasing risk levels.

Banks do not lend against shares as they do with, say, property so unless there is equity in the home to further borrow against, it would need to be a margin loan product.

Unfortunately, any major market correction can lead to you having to sell shares at the very worst time, so margin loans should only be used by experienced investors who have sufficient equity not to be caught with a margin call.

There are some products that invest in Australian shares and have an internal gearing level of an additional 20% or 30% of exposure to the market.

So if you want to take on some more risk to achieve a higher return, you might consider this type of investment.