And in the retirement portfolio we never use margin under any circumstances. In a few minutes you will see how margin can be used with volatility to accumulate shares of good companies for long-term investments. The ultimate question which you must answer is how this fits with your personality. If you are unsure then do not use this strategy. If you decide to use margin then establish clear guidelines and do not veer from them.
Volatility causes some investors to panic and lose large sums of money.
However, if volatility is understood and used properly it can be an investor's best friend. In fact, being on the right side of volatility has produced the majority of our returns. Our use of volatility will be come apparent as we further explain the details of our strategy. There are two dominant approaches to investment philosophy which are hotly and passionately debated. This approach is espoused by great investors like Peter Lynch and Warren Buffet.