New ways of investing in financial markets。Around the world, new markets are opening up, new tools are being developed, and new investors are coming into play.。

What you can get back from investing in the financial markets？

Traditionally, the term "investment" means buy and hold.。Historical data suggests that long-held positions ultimately pay off。

Long-term returns on stocks: about 8% as measured by the S & P 500 Stock Index from 1957 to 2018。

Long-term returns on government bonds: According to investment research firm Morningstar, government bonds return between 5 and 6 percent。

Long-term returns on corporate bonds: The nominal average annualized returns on investment-grade corporate bonds from 1928 to 2019 were.

AAA-rated corporate bonds: 5.7%
BBB-rated corporate bonds: 7.0%
Junk bonds: 8.1%

What to invest in？

There are a range of other portfolios to consider。Some have been developed over centuries and trading procedures have been tested。There is also a range of financial instruments such as options, futures and commodities that allow you to make more complex investments。

Bonds

In the long run, it is difficult to go against the market, and the additional risk involved in holding assets such as equities can lead to greater returns。Similarly, corporate bonds have a higher default risk than government bonds。

The 20-year total returns of the Vanguard Long-Term Bond Index Fund (VBLTX) and the S & P 500 ETF (SPY) are as follows.

Real Estate

Real estate and currency are popular places for people to invest and try to get a return, you don't have to own a property to get into the industry。Real Estate Investment Trusts (REITs) offer investors the opportunity to build a diversified real estate portfolio。

Foreign Exchange

Forex trading is very popular among short-term traders。The characteristics of the market and the depth of liquidity also attract traders to use technical analysis and automated trading techniques, which can also attract investors with longer maturities。

Family offices, funds, high net worth individuals and even retail investors can take advantage of foreign exchange movements.。If the investment strategy involves holding a percentage of net asset cash, it can be done at any location.。

In fact, when "hot money" is transferred from one country to another in order to obtain the best interest rate on cash balances, interest rate adjustments tend to trigger foreign exchange fluctuations.。

Investing in foreign exchange requires consideration of interest rate returns and potential foreign exchange movements, which are often consistent。If you put your money in an Australian bank account and the RBA raises interest rates, then a win-win is a higher return and a relative appreciation of the Australian dollar。

Futures and Options

Derivatives such as futures options also provide market exposure, and they can also be used as a form of insurance。

For the total portfolio, it may cost less to purchase long-term out-of-the-money put options in an equity index。It will provide protection to the downside, as if the stock market does fall into a meltdown, and put options can enter the capital and make up for losses in other areas.。

Commodities

Some commodities are particularly suitable for buy-and-hold investment strategies, especially the controversial gold。

The trading community is torn between the convenience of holding through a third party (e.g. in ETF form or in physical form)。

Most people believe that if the global financial system does collapse, gold will become the world's currency.。In this case, everyone will want to own their own assets, even jewelry。

If it is kept in a vault or online account, you may rely on others to give you access to property that has exploded in value。

How to make money using CFDs？

There are countless markets and instruments in which you can invest, one of which is a contract for difference (CFD).。CFDs have some special features that are particularly useful for short-term trading。

One measure of CFDs is their undoubted popularity。It is calculated that the volume of CFD transactions in the foreign exchange market alone amounts to 5 per day..4 trillion dollars。

Variety: CFD products cover individual stocks, bonds, stock indices, cryptocurrencies, foreign exchange, etc., and the diversification of the CFD market is one of its advantages.。

Convenient: All the above markets can be traded through the same account if you choose the right broker。The first priority is to ensure that your broker is regulated by a primary institution, and then consider the number and size of the market.。

Investing in physical gold offers a unique form of ownership to buy and sell gold CFDs positions with the click of a button。When you hold it, you get real-time pricing reports and access to research and analysis tools。

Short selling: If you think the gold price is higher than it should be, any hint that the price will fall can be traded using CFDs。

You don't need to own an asset to sell, and this "short selling" process is one of the attractions of CFDs and why they are popular with short-term traders.。

Financing costs: Since CFDs are derivatives, trading involves margin.。When a broker uses your cash balance as a deposit to buy a position that is larger than your original deposit, they are actually lending you a loan of funds that incurs an overnight financing charge。

Long-running investment strategies tend to be cheaper to hold than CFDs。

Cost advantage: Frequent entry and exit positions may incur some cost。You need to consider bid-ask spreads, an area where professional CFD brokers often compete。

Traders who use CFDs have more positive information.。Depending on your country, you may be able to avoid certain transaction taxes。For example, a UK-registered trader can use CFDs to avoid the 0.5% SDRT fee。

Leverage: CFDs allow you to extend risk-reward。Using leverage can amplify profits and losses, which is a risky method and is not desirable for novice traders。It is worth noting that it offers something different from the standard buy-and-hold approach to investing。

Conclusion

In fact, when considering investing in CFDs, it is not an either-or situation。Finding a balance between long-term and short-term investment objectives requires choosing the right tool for the job。

Ingenious features of CFDs, such as "short selling," are hard to ignore。It is widely believed in the trading community that CFD financing fees start to become a factor after a few weeks, making CFD particularly useful for short-term speculation rather than long-term investment.。

Short-term speculation does carry additional risks, and the approach you take needs to be tailored to your lifestyle and the time it takes to get a return.。