  It is common knowledge that leverage can increase the potential returns of an
investment, at the expense of increased risk. For a passive investor in the
stock market, leverage can be achieved using margin debt or leveraged-ETFs. We
perform bootstrapped Monte-Carlo simulations of leveraged (and unleveraged)
mixed portfolios of stocks and bonds, based on past stock market data, and show
that leverage can amplify the potential returns, without significantly
increasing the risk for long-term investors.
