People who are scared of investment have different sources for their worry. Some people have a lot to lose. They don’t have a lot of extra money to spend, a financial buffer between themselves and the harsh realities of life. Others might be in a better financial position, just lacking knowledge about how investment works. Still others might not trust the solidity of the long term investment environment. Some people see the financial entities which underlay long term investments almost like fault lines in California. They know that something is going to go wrong SOME DAY, and they want to make sure they’re not deeply invested when it does.
I’m not here to say that these are unreasonable fears. No one says that investment is without risk. But you’ve got to accept a little risk in order to get a reward. Long term investments, like ETFs, tend to take a long time to pay off. They don’t have the high risk of some shorter investments, but it’s a risk that’s spread out over a long period of time, sometimes decades. 30 years is a long time to hope that nothing goes wrong, so shorter term investments work better for a certain kind of investor. What I want to demonstrate is how CFD trading can help allay all three worries mentioned in the first paragraph.
- I don’t have enough money. Lots of people feel they don’t have enough money to invest. But CFD brokers like CMC Markets require minimal first investments. You won’t have to sink every extra dollar you have in CFD. Though the risk is higher than in longer termed investments, these investments will go better for you as you acquire new knowledge. With free educational resources available through most brokers, you can quickly learn how to do this form of investment well, before you risk any money at all on it. This way, you can make an early first investment pay off, even if you don’t spend a lot of money the first time.
- I don’t know how investment works. Yes you do. At its core, investment is about buying something and then selling it for a profit. Any kid who grew up trading cards on the playground understands this concept. Good investors learn to repeat these profitable transactions over and over. CFD trading is great because the trades can be made as quickly as you are able. This gives you the opportunity to test your skill many, many times, without having to wait days, weeks, or years to see how your decisions turned out.
- I’m worried that financial systems will collapse. This is a real concern for some people. And it’s not totally unwarranted. We’ve seen major nations lose their financial stability in recent years, and your nation could be among them during your lifetime. Though there are good reasons to trust that this won’t be the case, it’s not unwise to invest in short term investments which won’t have the chance to fail on the basis of political upheaval. CFD performs well on this metric, offering trades which resolve in minutes, not decades.