Why CFDs Are The Best Way To Invest Your Money
Buying and selling stocks is the best known form of investing but it isn’t always the best. There are quite a lot of risks involved in playing the stock market and you need a chunk of cash if you want to see a good return. But you shouldn’t give up on investing just yet, there are some great alternatives that are less risky and don’t require as much upfront initial investment. CFDs or contracts for difference are much better for somebody that wants to invest small amounts with fewer risks.
When you invest in contracts for difference, you don’t actually buy the stock itself. Instead, you’re betting on whether the market will go up or down. So why exactly is that better? These are just some of the reasons why you should consider investing in CFDs.
When you buy a stock, you have to pay the value of that stock in its entirety. But when you’re investing in CFDs, it’s a different story. You can make an investment with a small fraction of the original value of the stock, meaning that it’s a lot easier for people that only have a small amount of money to get involved. The cheap initial investment also makes it a lot easier for you to spread your investments out which is the key to sensible and safe investing.
A Huge Range Of Markets
One of the other major benefits of trading CFDs is that you can get involved in so many different markets all in one place. When you’re trading on the CMC Markets you can invest in over 10,000 different things, all in one place. Again, having that choice allows you to spread your money out as much as possible and reduce your risks.
Trade Out Of Hours
Stocks can only be traded when the markets are open but you can trade your CFDs at any time. This is a major benefit because you can react to company announcements there and then, instead of having to wait until the market opens. This gives you a lot more security because you can get out of a bad trade right away before you lose too much money.
No Stamp Duty
Whenever you buy a stock, you have to pay stamp duty of 0.5 percent on the transaction. But the rules for CFDs are different. Because you don’t actually own the stock that you’re betting on, you aren’t eligible for the stamp duty. That means you’ll get to keep more of the money that you make.
If you own a stock and the value goes down, you’re obviously losing money. You can only make a profit when the value of the stock increases. But with CFDs, you can short a stock which means betting that the value of the stock will decrease. This essentially doubles your investment options and gives you more freedom.
CFDs are one of the best investment opportunities out there right now and you should definitely put your money into them.