LONDON, February 3, 2011 /PRNewswire-FirstCall/ -- Gone are the days of keeping one's money under the mattress or in a shoebox on top of the wardrobe. Today, if you have money to spare, there are dozens of ways to invest it. From financial spread betting ( http://www.cityindex.co.uk/spread-betting/) to investment funds and share dealing, this article takes a look at three of the investment options available to you.
Remember, investing money is not the same as saving it. To save is to put your money aside without risk, usually with the benefit of interest. In investing, the risks are high and the returns are not guaranteed, but your money has a lot more potential to grow.
Investment funds effectively combine your money with other people's to spread it across a wider range of companies than if you were each investing alone. In theory this makes for a lower-risk investment. The disadvantage is that beyond selecting the fund and company you wish to use, you have no say in where your money is invested. An independent firm manages the fund to buy assets, generally stocks and shares, with the aim of generating the best possible returns for you and your fellow investors.
When you buy shares (also known as stocks and equities) you buy a stake in a company and consequently co-own it with the other shareholders.
Shares are traded based on what the buyers and sellers perceive companies to be worth at the time. This means that the prices of shares tend to fluctuate - some more than others. If you buy shares in a company which goes on to perform well, the value of your shares can increase and you may be able to sell them at a profit. You might also receive a share of the profits through dividends. If the company performs badly, however, you may not receive dividends and your shares will lose value.
Financial spread betting is a tax-free* way of trading the price movements of markets across the globe. Spread bettors can 'go long' (buy) or 'short' (sell) on market prices, meaning that they can profit even when a company or market is decreasing in value. You can also access the trading platform even when you are away from your computer, as provider City Index (http://www.cityindex.co.uk/) now offers a mobile spread betting app compatible with iPhone, Blackberry, Android, Java and Windows 7. The risks are high, and traders can lose more than their initial deposit, but financial spread betting provides an innovative alternative to other investment methods.
Interested in finding out more about spread betting? You can experience it first-hand right now with a free spread betting demo account from City Index. Sign-up takes just a few minutes and you only trade with a virtual cash balance, so you can try out the trading platform risk-free. Find out more at http://www.cityindex.co.uk/learn-to-trade/demo-account.aspx.
Alternatively, learn more by getting face-to-face with an expert at a free spread betting seminar.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for differences (CFDs) and, in the UK, spread betting.
We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. For more information, visit
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
*Spread betting is exempt from UK stamp duty and UK Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
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SOURCE City Index