subject: Trading The Markets And The Financial Recovery [print this page] With the world in recovery mode, many people are still questioning how the financial markets got so out of control. They are also questioning something a little closer to home; how to better look after their own money and finances.
If we are being honest with ourselves, we would probably admit that we can improve on at least one of the following; long term investments, tax efficiency, actively reviewing our existing investments and looking at new opportunities that the markets in 2009-2010 have provided / will provide.
Also, I dont think that there are many of us who wouldnt benefit from putting more thought and effort into these key areas. Having said that, there are a growing number of individuals who are making use of a newer, and highly regulated, form of trading.
One type of trading, namely financial spread betting, has a range of attractive features and is an option worth considering as part of your portfolio.
When speculating though you must always remind yourself that the markets can go down as well as up. With spread betting you can lose more than your original stake or investment.
But why trade if there is a risk?
Whether you have an existing investment plan or not, it always worth considering any avenue that offers quick, simple access to the markets and a range of tax-free* advantages. Spread betting is one such avenue.
Of the many other advantages, spread betting profits do not incur capital gains tax*. You are not actually buying and selling any assets or stock or shares. You are simply speculating on the future price or value of a financial market.
A boon for many spread bettors is the sheer convenience of trading over the phone and online, even after the main stock markets and futures exchanges have closed.
Another plus point is that there may be occasions when an investor wishes to close a spread bet early. This can work in two ways. It can help you limit a losing position or it can also help you lock in profits on a winning trade.
The Financial Services Authority regulates the spread betting companies. This helps to ensure a certain level of quality or, more importantly, financial protection. With regulated companies like paddypowertrader you can trade some markets 24 hours a day, including key Forex and Stock Market Index markets. Naturally, you can also trade Crude Oil, Gold, UK and US shares and so on.
So whilst there are a good number of positives, it is important to understand the negatives.
Spread bets do carry a high level of risk so you should only speculate with money you can afford to lose. Before you trade, please ensure that spread betting matches your investment objectives, make sure you familiarise yourself with the risks involved and seek independent advice where necessary.
* Based on current UK Tax law. If you pay tax in a jurisdiction other than the UK then this may be different.
by: Robert Thomas
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