This is the sort of comment that many people will disagree with, because ... I have a margin loan with my shares.

So, if I had 10 dollars, in equity, I'd take out a $10 margin loan. For me, my margin loan is 7% interest, which because I'm in a 38% tax bracket, means its really about 4%. So this year, my shares grew 8.5%. So 20 dollars would become 21.70 then minus the interest of 0.40 becomes 21.30, so 1.30 gain on $10, so 13% growth in net assets.

I'm in Australia and the stock market here is still well down on 2008, and currently has a dividend yield of 5% (so the dividend pays the interest on my margin loan). Hence I think the chance of a major downturn is low. I'm also very widely diversified (50 stocks - none more than 6% of my portfolio)

I would NOT do this in a booming market. In a booming market you can make a good return without leverage, and after most booms, comes a bust, which is very painful if you're leveraged.

Given, how high PE rations are in the USA - its an example, of somewhere where I would NOT use this strategy now.