In the event that you go away on a trip, unless that you are thoroughly familiar with the area, you generally pick up a map.

The same ought to be true with the majority of endeavors in your lifetime, most definitely trading. If you want to develop into aextremely good investor and not lose ground along the way, you will be needing a stock market investing guide.

A stock trading guide allows you to find out the downfalls as well as potential risks of the stock market. It additionally will help you to see the venues to earn the most money with the smallest amount of risk. Precisely like a map that points out the attractions along the way, the stock market investing guide helps yourecognise whenever to make a minor change in plans in order to take advantage of an opportunity.

A certain amount of people jump feet first into the stock market and believe that all they need to do is acquire a stock and after that wait and sell it when it will go up in price. If it were that simple, all of us would certainly do it.

However, not all stocks double in value right after you buy them, no matter whether your best pal informed you it would or not.

A good program about investing can help you to realize the right time to buy and sell stocks. It could possibly include precisely how to interpret the fundamentals on the actual stock or the technicals, the charts. Many tend to be often quitepuzzling and take a while to understand.

You do need a method, however, so you recognize when to invest in a rising stock but also any time you need to un-load a dog stock.

Having a program allows you conserve on taxes tips along with cut down some of the actual burden from profits at tax time. It also would need to include monitoring you revenue and losses so you will not have to invest several hours re-creating the entire 12 months prior to April 15th. You need to realize the big difference involving long term capital gain, short term capital as well as have a knowledge on wash sales.

Despite the fact that traditionalists make use of the older techniques to inform them to opportunities, there aremore sophisticated quicker ways to detect stocks that can put dollars in your pocket.

The newer methods are usually often easier to use and do not demand an MBA to understand. You don’t have to learn candle formations or be able to read the balance sheet for a corporation.Becoming familiar with the information denotes some thing else significant when you look for a stock market investing guide, KISS. KISS is an acronym for Keep It Simple Stupid. Sales people and business people normally use it for presentations but it applies to stock market investing guides likewise. If you have got a program you do not understand, you will not use it.

No matter what stock market investing guide you select, try to make it one that contains the actual material you need to make a profit. You may perhaps want to explore in to fundamentals and technicals but most people find that the easier systems work the most beneficial. They work the best simply because individuals use them.

You can make a bundle of money with the stock market but it takes knowledge. Learn more stock trading infromation

Corn Commentary

July Corn finished down 6 3/4 at 364 1/4, 6 off the high and 1 3/4 up from the low. December Corn closed down 6 1/4 at 382 3/4. This was 2 1/2 up from the low and 5 3/4 off the high.

The corn, wheat and soybean markets moved for the most part in tandem today starting with weakness overnight and further selling to start the day session. This was followed by modest firming into mid session and a setback to near the middle third of the day’s trading range into the close. We have apparently seen the first example of the potential for disruption of shipping into the Gulf after an oil-stained tanker was detained upon entering the Mississippi River. No word yet as to what the cleanliness standards will be as more and more ships are forced to sail through contaminated waters before entering Gulf ports. Traders said that the sharp rise in the dollar and sharply lower crude oil and equity markets contributed to today’s weakness in corn. Forecasts of cooler weather across much of the Corn Belt, starting this weekend, and the possibility of scattered light rains across major growing areas during the first half of next week added to the negative tone. Some longer term forecasts call for moderate to heavy rains to move into the western and NW Corn Belt by Thursday of next week followed by more moderate totals in the central and SW Corn Belt into the end of next week. China’s latest weekly auction of corn reserves resulted in the sale of 939,600 tonnes out a total of 993,300 tonnes that were offered.

Wheat Recap

 July Wheat finished down 7 at 460 1/2, 6 1/4 off the high and 4 1/4 up from the low. December Wheat closed down 7 3/4 at 508 3/4. This was 3 3/4 up from the low and 6 3/4 off the high.

The July wheat contract moved lower overnight and then made a new contract low to start the day session. The market firmed into mid session with further gains extending into early afternoon. However, the July contract failed to reach yesterday’s close on the rally and the day culminated with a sharp sell off into the lower half of the day’s trading range. Today’s close marked a new contract low close for the July wheat contract. The hard red winter wheat harvest is underway in the southern Plains with harvest expected to reach the Northern High Plains of Texas in the next couple of weeks. Some areas in the Southern Low Plains of Texas were damaged by hail from recent thunderstorms. South Korea is looking to buy 45,000 to 55,000 tonnes of feed wheat. Tunisia is tendering to buy 100,000 tonnes of soft wheat with the sale expected to go to France. They are also looking to buy 25,000 tonnes of durum wheat.

Soybeans Commentary

July Soybeans finished down 10 at 930 1/2, 10 1/2 off the high and 3 up from the low. November Soybeans closed down 12 1/2 at 903. This was 3 up from the low and 12 1/2 off the high.

Soybeans traded lower throughout the day today against a backdrop of sharply lower crude oil and equities and a sharply higher dollar. Favorable crop weather also added to the negative tone. The July soybean contract attempted a mid-session rally, but this fell short of yesterday’s close and the market finished near the middle third of the day’s trading range. New crop November and December contracts and lost to the old crop July contracts in both the soybean and meal markets. The Gulf (export) market continues to see background support from expectations that rising prices in Brazil and Argentina will result in further shifting of export business from South America to the US. Light farmer selling is also helping to support cash markets in the US. However, favorable crop weather in the US is reinforcing ideas that this year’s US soybean yields could be higher than the USDA’s current projection of 42.9 bushels per acre. Last year’s US soybean yield was 44.0 bushels per acre under, cool, wet and nearly ideal conditions. One analyst noted that the cooler forecast for the coming weekend and into next week and the possibility of improved rainfall later next week was particularly favorable in that it would keep the current hot and relatively dry spell from lasting long enough to cause stress to recently planted soybean fields.

July Soymeal closed down 2.6 at 271.1. This was 1.1 up from the low and 3.3 off the high.

July Soybean Oil finished down 0.35 at 37.17, 0.32 off the high and 0.35 up from the low.

July Rice finished down 0.45 at 11.62, 0.03 off the high and 0.04 up  from the low.

July Oats closed down 7 1/2 at 191 1/2. This was equal to the low and 9 off the high.  

The daily commentaries provide a review of each commodity’s traded price activity, an analysis of the factors that influenced price activity, a review of any reports released that day, and a look ahead at the next day’s schedule.  CME Group provides market commentaries for wheat, soybeans, corn, silver and gold.

We do not guarantee the accuracy of the information in the Market Commentaries, but we believe the information acquired is from trustworthy sources. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any options or futures contracts.

Andy Waldock circulates this blog.  Andy Waldock is a trader, analyst, broker and asset manager.  As a result, Andy Waldock may have positions for himself, his customers, or his relatives in any market discussed. The blog is meant for educational purposes and to develop a dialogue among those with an interest in the commodity markets. The commodity markets employ a high degree of leverage and may not be appropriate for all investors. There is considerable risk in investing in futures.

If you want to be a successful investor, you need to follow some rules. Ignore these rules at your own peril. I follow them and if you want to be successful and have less stress, you will as well.

Let me say right here that these are just three   financial investing rules of a handful. However, I’ve chosen these concepts to pass on to you today because they are very important . Many other rules are more idea-based. The concepts below, if not followed, are vital to your financial investing success. Ok, here we go.

Is that your milk money? I hope not.

You’d think this would be well known, but the world is full of people who invest with capital they can’t afford to lose. You need to realize that a loss potential exists. If you go into any investment with the notion that somehow you have no chance of losing any capital , you’re setting yourself up for disaster .

Never, I mean never, use capital you can’t afford to never see again. I’m not talking about capital you’d hate to be without, that’s different. None of us wants to suffer a loss . Let me ask you, if you somehow lost 100 percent of your financial investment , could you sustain your life? If so, proceed forward. If not, investing won’t work for you

It’s all about proper planning.

Many investors who fail just jump into something and play it as they go. This is dead wrong. Before you allocate even $1 into any investment , you need to know where you’re going from here. Just like bond investing , you need an exit plane in place before acting . You must have a profit idea in place and know how much loss you’re willing to take.

It’s not enough to just have an action plan though. Follow it! And you’ll probably need to revise it over time.

Don’t force opportunity

You know timing is critical.   We’ve all heard this before. The idea here is not just striking at the right moment , but not forcing action . Just because the right time has come as far as your capital is concerned doesn’t mean there’s a good opportunity for you as an investor.

Look at stocks for example. You could have $25,000 to invest right now, but it’s possible that there are no solid stock plays for you at this moment. There might be in an hour, a day or a week. Don’t force the issue.   Opportunity will come to you.

Like I said, there are many other investing rules to follow. These are a few great financial investing guidelines that I follow and they work well . Any solid investor will list these right up at the top.

There are a variety of sources  private lenders can employ to take advantage of the incredible investment opportunities  available  to them, and  countless alternate ways of funding a real estate deal that don’t require any of your own cash or credit.  We will discuss some of the options and  different ways to finance your deals!  The first one is to wet your appetite. Consider this strategy that will help you attract capital.

Strategy #1: Private Money Lenders and CASH

If you’ve ever heard the saying “fast money wins” or “cash is king”, then you know why this is the best way to fund your deals….. with one condition. The cash you use in funding your deals should belong to someone else ! Develop networks for private money loans with people who can become your private mortgage lenders.

Your own cash reserves are meant for you and your household to live on. Don’t  assume a professional investor puts his own funds into his real estate deals. Not likely! Conventional lenders  want you to have a cash down payment so that you have a stake in the game . It’s ok to combine cash with other types of financing . Just be sure that the cash comes from someone else . Just as you would, the private lenders you work with have money allocated specifically for investment purposes . Utilize their capital to maximize your leverage and ability to accumulate the most profitable real estate portfolio possible in the shortest amount of time. Private money loans from these individuals will fund your deals.

Pros:
Cash held in most types of bank accounts can be moved easily and can fund your deals in minutes instead of  days . Fees areusually reasonable for wire transfers and cashier’s checks.

Cons:
Most individuals don’t have huge cash reserves that are not in some  type of investment account such as a CD, IRA, or money market account. This could impact the amount of funds available to you very quickly , so be prepared to keep cash moving for your lenders to tempt them to hold their cash in reserves to fund your deals.

Strategy:
Although it’s not always necessary for you to pay points to your private lenders, doing so may encourage them to hold their resources in a liquid state, not tie it up for extended time periods in low-yielding financial instruments like CD’s and bonds. Consider offering your lenders the option to withdraw their funds early with no penalty in the event of  emergency. As long as they can give you 30-45 days notice, offer not to charge them for an early payoff request. This is a welcome benefit to private lenders,  building trust and comfort.  They are familiar with early withdrawal penalties from most financial institutions on fixed term investments. Having the backing of a network of private mortgage lenders  frees you to take charge of the most lucrative deals…fast money wins.

We all know that Stock Market Investing is a great idea, and it does make sense to profit from major market rallies and declines. This is the reason insurance companies grow their clients’ contributions in annuity products. But even traditional IRA, and 401K savings plans don’t use stock market investing as efficiently as private insurance firms and pension funds, in that they only make their money when the market goes up .

Savvy insurance firms make money regardless of market direction , or at the very least, they hedge their investments so well, that they almost never risk losing more than 20%, even in the worst possible scenarios . The traditional 401K industry on the other hand is not hedged, and it only makes money during market rallies , while risking everything when markets start going down. Here are some of the myths and facts that even those 401K fund managers are not aware of, or just don’t have time to figure out.

Some of the greatest stock market myths:

1. Stock markets always go up in the long run

Incorrect ! Indices do go up in the long run , but if a stock is severely underperforming it gets de-listed, and another one will take its place. What if the stock you invested in gets hit hard and is finally de-listed? Markets will sure rally back but without your stock! And you certainly don’t want your 401K account to include such stocks .

 2. If you diversify too much you will eliminate risk

Incorrect ! If you diversify too much you will get in a situation where, your investment will make a very tiny return, perhaps even less than 5% per year . Really that is a losing deal or at best, a breakeven deal when considering the stealth cost of inflation .

3. If that earning’s report is good, the stock will go higher

Not necessarily! The good news may already have been baked into the cake, the stock can still go either way .

4. Your broker can help you as they have the best analysts

I don’t think so ! Brokers produce income in different ways, and they don’t have qualified analysts to make you money. Unless you have direct information from an investment banker, really there’s no other infallable way to predict what direction the market is going .

Stock Market Investing In Reality…

The stock market is able to provide decent, high potential for profitable stocks, and you can even plan your retirement based on it. Unlike what many, so called ‘investment professionals’ will tell you about 10% or 20%, you can in fact make a whole lot make lots } more! But it requires doing a lot of homework and following markets everyday. You can for example develop stock market investing strategies that involve buying the same stocks at regular timeframes , and liquidating them when they show a small return of around 5% to 7%. But because you repeat the process many times over, you end up making a lot over the year.

Seasoned investors and investors make as much as 200% per year, that is tripling their start up capital. They usually allocate a section of their money to this strategy as it is considered risky and stressful, but this risk and stress are not worth suffering unless they can triple their investment !

Most of the time , stock market investing is not for everyone and it’s easy to make stock market investing mistakes, only people who are serious should consider it, but it is very rewarding . And these serious, rational people, are not the people who believe in luck, and who buy lottery tickets every week, these are rational people who do objective market analysis , and keep their emotions out of their investment decisions. For those who just want to have a self directed IRA and make their own stock market investing decisions through it, they can choose an investment strategy, one that is stress-free, and needs to make no more than 20% per year. It’s conceivable to do that, and even a return of 20% annually will make their retirement day come a lot faster !

ETFs (or exchange traded funds) are kind of like mutual funds in a way. An exchange traded fund is basically a collection of stocks—usually as part of a “theme” for the ETF. You can get a huge benefit by buying ETFs verses stocks, one by one.

Not sure if you know this or not, but one huge advantage of ETFs is that you can buy them and sell them as you wish without a long process. Forget all the extra fees, like management costs. Just pay your usually trading charge with your broker and you’re set. It’s really simple. If you normally pay $4.50 to buy stock, you’d pay this amount to buy and sell an ETF of your choosing. The price of the ETF is calculated from the net asset value of all the stocks in the fund.

When you want to buy or sell an ETF, it’s as simple as putting in an order. Mutual funds normally operate by end of day data. With ETFs, you can take advantage of intraday moves and not wait. Don’t limit yourself. Mutual funds are a thing of the past. Missing out on moves intraday can be costly. You wouldn’t be able to react until the end of the trading day. By then, it might be too late to respond appropriately.

If you trade small cap stocks, there’s a great ETF for that as well. It follows the small cap 600 index and it’s from iShares.

Again ETF’s have similarities to mutual funds as well. ETFs exist for many trading avenues, like oil stocks, gold investing, S&P 500, etc. If you want to just invest in the technology sector, there is an ETF for that. If you want to invest in small caps with hot growth potential there is an ETF for that. So much potential. For example, iShares has lots of ETFs you can invest in. If you’re in a mutual fund right now, there’s probably an ETF for it, which means you’re wasting capital right now.

Don’t short change yourself. Investment professionals use ETFs and you should too. There’s so many advantages to using them, even if you like picking individual stocks too. No need for a special setup. Your broker will allow you to invest in exchange traded funds right now.

By the way, if you’re looking for a better job in this up and down economy, think about becoming a pharmacy technician. They make nice money and you don’t need a college degree or lots of training. Here’s a site that talks about it.

I love exchange traded funds and have used them a lot in my investment strategy.

How you ever thought about doing a trade globally? Some individuals might be a bit hesitant to do such a thing, but the chance is just waiting to suit your needs out there. You don’t actually have to travel outside your country, if that’s your concern. With the availability with the World wide web, you can actually do foreign exchange buying and selling on a global scale even in your own house, at operate, and regardless of the location.

The FX marketplace appears complex, especially to new traders, and they locate it rather tough to go about the trade. But nothing is impossible once you’ve learned the trade. It can be a worthwhile venture which you may well want to take into account even on a tight office schedule.

Being employed in the particular organization may possibly not give you all of the money which you would need to finance your everyday living. Carrying out some extra operate is often advised specially in today’s times when money is hard to find. Worry no more; the FX marketplace isn’t far from your achieve.

Identify your goals upon entering the FX marketplace. This may be the primary action, so that you will stay focused in your endeavor. As soon as you’ve set up a objective, you must do all it takes to achieve that objective, but it ought to be in a reasonable manner.

In going via forex dealing, you’ll need an investment program, and a great one. Do not settle for anything less since an successful method to succeed in foreign exchange dealing can be a great plan.

Most rookies commit the biggest mistake of their lives by availing fake applications. The FX industry is a massive business, and the fact is, many scams and con artists abound the Web, which actually provides useless materials for beginners. This frequently leads to frustrations of beginners because they’ve already failed even just before they get to start the actual trade.

Find a legitimate foreign exchange purchase program. Despite the fact that it may require a bit of searching close to, too as a little of one’s time, as soon as you get what you’re trying to find, you are inside a great begin.

You do not have to settle with expensive applications, nor with applications promising simple and fast profits with much less the chance. You must be aware that though the FX market provides a great deal of opportunities, it can be also surrounded with a great deal of hazards. To become like the pros, you have to learn the forex trading method; and you need to be serious in learning it.

A great system is dynamic. It gives daily advice, manuals, DVD materials, pc disks, and other important forex trading trading stuffs or resources to transform you into a succesful trader. Check if their previous clients are satisfied with their services, and see if the organization has built a great reputation inside the company.

Professional traders regard forex trading trading like a science, some thinks it’s an art; and to begin the real trade, you must undergo a great deal of practice. Following all, practice makes a perfect trader. Demo accounts are surefire techniques to learn the distinct methods utilized within the FX market. Right after you’ve mastered it, you are able to proceed to a mini account. Here it is possible to do an actual trade but the hazards are minimal. If you believe you’re really ready, then get a typical dealing account. This can be a extremely effective step-by-step process simply because you get to learn a whole lot of things although your practicing. Usually maintain calmness, and act like the pros. You are about to make big money, one that you simply most likely never imagined inside your whole life.

Foreign exchange buying and selling is carried out on a margin. Margin trading allows you to control a lot more cash than what is in fact in your hands. For you personally to trade a single million US dollars, you should have a security deposit worth ten thousand US dollars. This is a typical example with the rate at 1%.

The FX market spans around the globe, so you can trade twenty-four hours a day. In case you choose to accomplish margin trading, the spread rate is much lower compared to futures buying and selling. The requirements are also really low.

Familiarize yourself with all the in and outs of forex trading dealing. Buying and selling globally poses a great deal of danger; you should understand to overcome all these hazards in order to earn big profits. Get a great forex trading dealing plan.

You can find more information about stock charts software, microcap stock screener, and counter cyclical stock

Vendor opencredit  benchmarking from corporate America .

Every industry has its fair share of reports , surveys, key indicators  , and sound bites.  The Profit Recovery industry is the same  .  In the last few years we have performed quite a bit of analysis and reporting  to exposed some compelling data  about recovering open credits from your vendors and suppliers.

From a survey of over 100 clients and prospects we have discovered that most audit  recovery providers sample only the top 5-20% of your vendor population when auditing  vendor -side credits?  Our  study  shows  (based on feed back from Accounts Payable  professionals) that without the aid of a two-way communiction compliance aplication (Lavante is the only firm with such an app .)  traditional  venodr side  audit reviews, whether they are done by an outside  firms or by internal efforts simply cannot support indepth vendor penetration with manual methods and cap out at 20%. 

Lavante  vendor open credit  recovery benchmarking demonstrates that 61% of vendor  credit opportunity resides in the lower 80% of your vendor’ accounting files.  In other words  , traditional manual  methods, can only recover , at most, 39% of the open credits available to you .

 An additionally fact you may not be mindful of is that 37% of supplier -side  credits come from product returns.  This category is by far the largest we are tracking .  This has huge implications not only to the existing process you have for returns transactions, but also on where your profit recovery audit should focus.  In contrast, we’ve found that only 9% of vendor -side claims are the result of duplicate payments.  Please note that hese results vary depending on industry .   

Additional results  signal that the medium claim amount from a vendor credit recovery review is $817.  (with a range of about $400-$1200)  We have also discovered that the actual recovery potential for vendor credit recovery is $600,000 -$900,000 per $1Billion in addressable spend volume. Although Lavante is the only recovery provider to project recoveries below the typical industry benchmark ($1M per $1B in spend) we feel confident that this carefully calculated metric passes both the scientific test and a gut test as well.  When we approach new prospects and we explain that depending on their industry they stand to recovery within this range that data is forever well received based on what they have actually seen from other firms and not what they have been promised.

Lavante argues this issue of recovering otherwise lost revenue can successfully be addressed if your organization implements a strict supplier information management, SIM policy. This policy should outline the exact process and steps  that your organization follows to acquire, handle and manage information specifically related  to each of your suppliers. 

Based on our discoveries , we have also determined that for  every month you do not perform an in depth automated vendor credit review you risk  losing $63,000 per billion dollars of spend with no chance of recovering it.  While $63,000 may not be a huge amount for you, if you spend multiple billions of dollars, and delay just a quarter’s time, that $63,000 figure becomes a large sum of money.

If you have any more questions about our benchmarking survey please join the conversation at Lavante.com…

Almost every stock market investor speaks about “recognizing value.” I have found that interest in value investment ebbs and flows based on the market. Nobody wants to pay more for the stock, or keep holding one if the price will get nutty.

And that makes ask a important question: How can you will find value in the stock market?

It depends whom you ask…

The fathers of value investing, naturally, were Ben Graham and David Dodd, two instructors at Columbia Business School who wrote the investment classic, Security Analysis.

Both argued that value investing is in relation to purchasing firms that are selling below their intrinsic value.

How can you identify that? As per Graham & Dodd, that means purchasing companies that…

Deal at big discounts to book value. Take high dividend yields. Have low price-to-earnings (P/E) ratios.

Buying therefore is not just supposed to lead to higher returns. It is also intended to provide a big “margin of safety.” The thought is that if you buy a security right, your loss is limited.

A number of academic research have shown that once you go by the principles of Graham and Dodd, you need to do well over the long period.

But you will discover potential problems with this method…

Firstly, stocks are not often so cheap while they were back in the 1930s when Security Analysis was written. Or even as low-cost the same as they used to be back in 1982 while the typical stock offered for lower than book value and eight times earnings and yielded over 6%.

And if you sat out the last twenty eight years out because stocks had been too high-priced, you missed an awful many chances.

When you do discover a stock that will meets Graham and Dodd’s stringent requirements, you furthermore may should be patient. Why? For the reason that companies which are very cheap are from favor for any reason. Sales tend to be level or downward. Earnings are weak. Gain margins are small.

You cannot succeed simply by buying a firm that is low-cost. (It might always become more affordable.) You have to purchase a firm that will someday - and maybe not too far off - be dear to others. Otherwise, when will you’re taking gains?

Thus perhaps Graham and Dodd’s idea needs modifying. (Warren Buffett, Graham’s most famous student, has absolutely established ways to change it.)

I have found that the definition of value as well as the instruments to realize a margin of security are flexible. And The Oxford Club has found winning ways of bend them.

To my intelligence, one stock that goes from $10 to $50 was a “value” at $10. I do not care what the P/E or price-to-book was at the time. Among the luxury of hindsight, it was clearly a discount. Why quibble?

But die-hard value investors will claim that if the stock was “overvalued” at $10, it can be just more grossly so at $50 - and therefore, you’re on great risk holding it.

I disagree. If you use trailing stops your upside is unlimited and your profits totally protected. As long as a stock keeps trending up, we’re pleased to hold on - no matter what the valuation. When the stock in the long run turns, as entirely do ultimately, our stops will keep the gains from slipping by way of our fingers.

As for value analysis, quite frankly, we don’t pay out a lot of time poring over P/Es and book values. We are just focused on finding companies which are likely to prove dramatic, better-than-projected growth in the quarters to come. These shares tend to be more costly than typical, just as businesses that could show little or no growth tend to be less costly than average.

Growth stocks usually run. Gains regularly come faster rather than later. Generally investors don’t have the patience being good value investors. John Templeton, for instance, held businesses in his flagship Templeton Growth Fund an more or less of 7.5 years.

But clients will begin to grouse if a stock doesn’t progress for 6 months. They call it “dead money” and begin itching to move it somewhere else.

I realize this instinct. However deep value investment as well as rapid trading don’t combine.

If you’re a patient, really long-term oriented trader, value investing be able to do miracles. If you’re not, you’ll be better off looking for firms which are set to smash estimates.

When it doubles or triples - or move up 50-fold or more like Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN) - never worry, other traders will concede it was “value” before.

Investing in stocks is difficult, especially in today turbulent and uncertain times. Subscribe to the Best Blue Chips which shows you the TOP 10 blue chip stocks to buy in this uncertain times. Click here to get your free Best Blue Chips Newsletter and build your long-term core holdings portfolio.

The discussion as to the suitability of financial spread betting as a means to invest is often up for debate.  After all, it is merely a form of online gambling – isn’t it? 

To get better insight of the argument, it is wise to study the hard truth.  Spread betting is a derivatives instrument offered by online financial broking firms.  They provide a platform to anybody who wants to take a chance and in essence guess on financial market fluctuations.  Thus, the trader never actually purchases the underlying product, and can make money from falling markets as much as from rising ones.

Spread betting is technically termed as a financial product and is only provided by companies that are regulated by the Financial Services Authority.  Trading is based on margin, like CFDs trading.  In most examples however, spread betting investors are not subject to CGT and regularly commission is not charged.  With a comparatively small amount of funds an investor can begin placing so-called ‘bets’ on a variety of markets.  These may include stocks, indices, commodities and currencies.

Bets opened by a trader are never generally open for longer than a day – it is a quick means of trade.

Thus, assuming these straightforward facts, may we assume that spread betting is truly a type of gambling?

The answer is “no”.  As a fully monitored activity, financial spread betting cannot be classed as a form of gambling.  A spread betting broker must adhere to a strict set of rules to permitted to offer accounts and a platform for trade.

In fact, many investors who partake in other versions of online investment, such as FX, partake in financial spread betting as an additional way to make money.  But is it a recommended means of investment?

In recent times, high-risk speculation on the market has been put in the firing line by many authorities and economists who argue that it can bring severe economic financial fallout.  A few have even accused derivatives trading as one of the main causes of the heavy recession of 2009.  Because traders are able to make money out of a falling market, commentators have argued that guesswork can end up aggressive and uncontrolled – thus driving the problems of currencies such as the euro in the last few months.

Whoever does choose to partake in financial spread betting ought to acquaint themselves with the high amount of risk that is involved.  Markets can change suddenly and without warning, meaning a bet that might have seemed a winner moments ago could suddenly turn the other way, leaving the trader with significant losses.