Why Spread Betting is the Most Affordable Investment Form
You may or may not have heard of spread betting. Spread betting has its roots in day trading methods from way back when, but the speed of today’s communication technologies have given the form many new possibilities. At its heart, spread betting is about anticipating how Forex, commodity, and index values are going to change over time. The user will go to a spread betting online platform like ETX Capital and choose two currencies/commodities/indices upon which to make a value speculation. Money committed, the user waits to see how the real-world values of these assets change over a time period chosen at the start of the session. If the value changes according to plan, dividends are incurred. That may seem complicated, but it’s really not, especially after you try it for even a few minutes. That’s yours to do on your own time. What we’re hoping to appreciate here is just how affordable Forex and/or spread betting is as a first investment type.
Let’s compare forex to investments commonly recommended to the general population for retirement, like the 401(k). The 401(k) is a great product, if you can get it. Typically worker sponsored, it’s a way to save and earn money for retirement. Employees put away money from their paychecks or salaries, which goes into a pot that buys up mutual funds or ETFs. Mutual funds are made up of little slivers of stocks, spread out across dozens or even hundreds of independent companies. ETFs are mutual funds traded just like stocks.
The idea is that by buying up lots of pieces of lots of companies, the investor will see their money grow just like the overall economy. First world economies tend to grow. They grow more often than they decline, meaning that if you keep your money invested for decades, you’ll see it grow in proportion to the rate of overall growth in the market. But to make that slow growth worthwhile, you’ve got to contribute quite a lot of money regularly. In the US, individuals can invest just over $5500 every year. Though that’s not a huge amount of money, it’s more than many people can comfortably save, all for slow growth that can be erased if the market happens to fall out near or during retirement.
Contrast this with Forex. A Forex account usually costs no more than $250 to start, depending on the platform. Many platforms have free educational Forex accounts, so users can get the hang of the system before committing even this small amount of money. Because of the huge changes that occur in the daily values of global currencies, there is great opportunity to double money daily, if not more! Of course, these great value fluctuations mean that there are many opportunities to lose, as well. But for people who want to get into investment, but have neither thousands of dollars nor decades to wait, Forex may be the best first bet. With practice and preparation, it’s possible to turn a little money into a lot, quickly and safely.