Making Money from Online Investments: Share Dealing, Spread Betting and CFDs

Leading economic commentators agree that the financial crisis we are entrenched in could reach an unprecedented scale, with only the smallest chance of a genuine recovery. Nevertheless there is still the opportunities for traders, investors and enthusiastic amateurs to earn a good income by making use of the variety of online share dealing and trading websites that have revolutionised our access to the stock market.

The history of our global boom and bust economy shows that the periods of downturn always mean the weakest links in the chain don’t survive. Only the strongest and most adaptable survive. Well, this applies to investors as much as businesses. In the past, if an individual wanted to buy and sell on the stock market, the fees involved could become exhorbitant. There are brokers who would take a 20% cut on investment profits in addition to a 2% fee annually. That can turn a 10% return into just 6% – even less depending on your management fees. This is magnified by the fact that the stock market collapses of late have reduced the levels of profit being made by investors. Investors today are struggling to earn the kinds of profits they were just a few years ago by traditional means.

But times, they are a changing. As the digital age matures, we’ve got access to instant real time information, high speed internet and sophisticated trading software. Essentially this means cutting out the middle man and recovering some of those lost profits for yourself. Online share trading services allow you to manage your own portfolio at minimal cost.

The other great thing about having your trading portfolio online is being able to look at your investments from along term point of view. It’s a far smarter approach than only looking at the short term quick wins

A consequence of the lack of predictability of the markets in the current financial climate, means that trading techniques such as financial spread betting are also on the rise. Rather than buying shares at one price and selling when they rise, spread betting doesn’t involve ownership at all; you simply bet on whether and how much the price will rise or fall. There is no doubt risk involved – yet skilful spreadbetting decisions can mean significant profits. A variant of financial spread betting is CFD trading, or Contracts for Difference. These are, quite simply, contracts between two people where each agrees to pay out on the difference between initial and final stock prices over a period of time. Both are an increasingly appealing option to actual share ownership for many investors. They are both also really simple to get into online, which has also lead to the increasing usage of online CFD trading and spread betting of late.

The moral of the story? Exactly like businesses and corporations, individual investors need to be thinking about cutting their costs, improving efficiency and looking for new opportunities. As far as safeguarding yourself against the slings and arrows of outrageous recession is concerned, the strongest tool in your belt might be to switch to online trading.