Miscellaneous

Why Putting Money Into a Bank is a Waste of Time

Making the best financial decisions for your future now is a sure way to maximise your money. Through sound investments, you will be able to secure your finances, which is one reason why putting money into a bank is a waste of time.

If you are looking for the best, most profitable options and information on where to park your money, look into online broker reviews for information about the best brokers and forex trading. Learning more about these types of accounts and investment opportunities is essential if you wish to make more money. Online brokers allow investors to trade in derivatives and other leveraged products.

Forex markets allow for the trade of international currencies and investors can profit from geopolitical events around the globe. Contracts for difference or CFDs, are a derivative product that can help to diversify your portfolio. These instruments allow investors to speculate on the rise or fall of the underlying assets, and while there is 100% exposure, the holder of the CFD is only buying the margin, not the entire asset.

In order to minimise the risk of such instruments, it is advisable to always purchase a stop-loss order that will limit the downside of the transaction. Leverage accounts and margin are best used sparingly, and while tempting, an investor should never utilise the entire amount of capital available to them from their broker.

The CFD contains a finite time period of ownership, and will expire on some pre-determined date. At the time of the order expiration, the investor will be responsible for any payment due to changes in the value of the underlying asset, or conversely, will receive a payment for any difference in their favour. If you are looking to open multiple CFD positions, it is not a bad idea to have multiple brokerage accounts, thus lessening the counterparty risk of the transactions.

Broker accounts allow for margin trading, and can put more of your money to work for you. When money is in the bank, or even in a money market account, there is less upside potential, and your money will make a low level of return. Interest rates at banks and money market funds are quite low, and even with compounding interest, your money will not be bringing you great returns. Having an emergency fund in a banking account, with six months of expenses set aside, will help you to rest easy, but it can be a mistake for many people to hold all of their funds at a traditional financial institution.

If you are looking to maximise the return on your discretionary funds, a bank really is a waste of time. Consider a broker account, where you can trade on margin and leverage your capital to realise much higher gains. Investing involves constant learning, and by stretching your business acumen by always increasing your knowledge base, your possibility of higher returns will grow exponentially, Broker accounts need to be fully vetted prior to making a selection, as they will become your investment partner. Forex and CFDs are just two examples of the exciting investment tools available to you through an investment account. 

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