Using Leverage to Reduce Risk
This column was originally published on RealMoney on Aug. 22, 2007, at 4:58 p.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.
In Scott Rothbort's recent article on how to handle market stress, he recommends getting rid of leverage 
by paying down any margin balances in your portfolio .
He explains his reasoning by writing, "Leverage is a wonderful thing when the markets are going your way. However, during periods of increased volatility and declining markets, leverage can work against you ... and erode your portfolio much faster than if you did not employ leverage at all."
And he is absolutely right. Don't become a deer stuck in the headlights -- take some action to avoid being flattened.
He Who Hesitates Is Lost
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