The principle of financial leverage means that financial institutions, investors or other individuals use a certain proportion of their own funds (leverage ratio) and a certain proportion of loan funds (debt ratio) to jointly invest in order to obtain a higher investment scale or achieve a larger investment scale with less funds. The principle of financial leverage is a financial tool, which can enable investors to obtain it within the investment risk and investment period. The basic concept of the principle of financial leverage is that investors can use their own funds and borrowed funds to jointly invest in order to obtain a higher investment scale or achieve a larger investment scale with less funds. The essence of the principle of financial leverage is that investors can use borrowed funds to obtain more investment funds at a lower cost, thus investing more assets and obtaining higher returns.

The implementation of the principle of financial leverage usually requires the participation of financial institutions, which can provide investors with loan funds and investment consulting services. Financial institutions can also provide investors with other financial instruments, such as options, futures, funds and the design and management of financial products. The implementation of the principle of financial leverage can also be achieved through the portfolio management services of financial institutions and investment consulting services of financial institutions.

The implementation of the principle of financial leverage has many advantages, which can help investors effectively manage investment risks and improve investment performance. The principle of financial leverage can help investors get it within a limited capital and investment period. In addition, the principle of financial leverage can also help investors concentrate their investment funds on assets with investment potential, thus obtaining.

There are also some risks in the principle of financial leverage, and investors may encounter unexpected situations, because investors may deviate from the original investment strategy or suffer investment losses because of market fluctuations. In addition, investors may also encounter high debt ratio, which leads to the failure of investors to repay on time, thus causing greater investment losses. Therefore, when applying the principle of financial leverage, investors should reasonably set the leverage ratio and control the debt ratio according to their own financial situation, so as to reduce investment risks.