This underpins a large and fast-growing marketplace, which is expected to peak at a valuation of $3.77 billion by 2028. So, the sector will grow at a CAGR of 7.8% over the next five years, as a growing number of retail traders join the financial marketplace.

Copy trading is a subset of this market and one that’s also becoming increasingly popular. But what are the pros and cons of this methodology?

What is Copy Trading and How Does it Work?

As a subset of social trading, copy trading allows you to mimic the orders of other investors and leverage these directly to your advantage.

In this respect, copy trading is an extension of social trading, as instead of simply observing other traders’ investments to inform your own, it programs your account to replicate orders in real time.

This is a largely automated strategy and one that often copies individual trades from experienced or high-performance traders in the marketplace.

In terms of functionality, you’ll have first to choose an online broker that offers copy trading services. You’ll then agree to the site’s T&Cs before accessing a portal where you can analyse the performance and trades executed by experienced traders.

Once you’ve appraised these traders and selected your preferred option (you can also analyse trading strategies and rates of commission) before depositing funds and getting started. 

What About the Pros and Cons of Copy Trading?

There are several advantages associated with copy trading, some of which are relatively overt. However, some potential drawbacks need to be considered, and we’ve broken these down in a little more detail below:

• Pro #1: Easy to Adopt: This is the single biggest advantage (especially for novice and inexperienced investors), as copy trading is incredibly easy to adopt once you’ve selected a reputable and successful trader. 
• Pro #2: Diversify Your Returns: The best and most experienced traders are likely to have diversified portfolios, as this is central to optimising returns over time. So, copy trading provides instant and effective diversification for your portfolio.
• Pro #3: Drive Long-Term Gains: The traders you can copy each have their unique strategy, which may be short and long-term in nature. So, if you’d like to sustain gains over time, copy trading can be an extremely productive strategy.
• Con #1: Understanding Market Risks: Copy trading largely negates the need to think and strategise, but this can cause you to overlook key market risks in your trades. This can prove dangerous, especially if you copy higher-risk strategies that increase your exposure in the market.
• Con #2: Increased Liquidity Risk: This means that you may not be able to exit positions at the desired or expected levels. This is a significant risk with copy trading, so you must study a trader’s risk management techniques and identify historical precedence in this respect.
• Con #3: Master Traders Still Make Errors: Around 70% of forex traders regularly lose money, including master traders. So, you could still incur losses when engaging in copy trading, which may be disproportionate and could be compounded by your lack of understanding surrounding the marketplace. 

The stock market is known for being quite complex, filled with jargon, and with a high level of risk. However, with some knowledge and research, anybody can get started with investing in stocks and potentially make a profit from it. If you are a beginner to stocks, keep reading to find out more about the basics of stock market investing and how to get started. 

What are Stocks?

Stocks are essentially shares of ownership in a company. When you buy a stock, you’re buying a small piece of the company and becoming a shareholder. Once you are a shareholder, this gives you the right to vote on certain company decisions and receive a portion of the company’s profits in the form of dividends. How much your stock is worth may rise and fall depending on the company’s success and the overall stock market performance. 

How to Choose the Right Stocks to Invest In 

There are several factors to consider when choosing the right stocks to invest in. Some of the most important things to think about include:

• Company financials: Consider things like revenue, earnings, and the overall financial health of the company. Companies that have strong financials and a positive outlook are generally considered to be wise investments. 
• Industry trends: Think about the overall health and growth of the industry the company operates in. If it’s in an industry that’s performing well and seeing a lot of growth, the stock is also more likely to perform well. 
• Management: Who leads and manages the company can have a significant impact on its success. Spend some time researching the track record and background of the management team to get an idea of the direction they are taking the company in. 
• Dividends: Some stocks pay out dividends, which are regular payments to all shareholders. If you’re looking for an investment that will provide you with a steady stream of income, these stocks might be a good choice. 

How to Start Investing in Stocks

Once you’ve got a clear understanding of what stocks are and how to choose the right ones to invest in, it’s time to get started. Some of the main steps to follow are:

1. Open a brokerage account: To start investing in stocks, you’ll need to open a brokerage account with a stockbroker. You can do this online or through a traditional brokerage. Spend some time researching your options and comparing the various fees and services before you decide. 
2. Fund your account: You’ll need to transfer funds into your account to start investing once you have an open brokerage account. You can do this in several ways, including transferring money directly from your account or setting up automatic monthly transfers. 
3. Choose your stocks: Once your account is funded, it’s time to choose which stocks you want to invest in. Consider the various factors outlined above, stay updated on volatility, and do your research before you decide. 
4. Place an order: Once you’ve chosen which stocks to invest in, you can place an order. There are several types of orders you can choose from including market orders, stop-loss orders, and limit orders. 
5. Monitor your investments: Once you’ve invested, it’s crucial to regularly monitor the performance of your stocks and make adjustments if necessary. 

The stock market is known for being complex, but with a basic understanding of how stocks work, how to choose the right ones, and how to invest in them, anybody can become a successful investor. 

While viewed as an option by an ever-growing number of people, trading is a challenging task. To venture into the trading ecosystem, whether you’d like to get involved in technical, swing, intraday, derivative, leverage, or any other type of trading, you must carry out considerable research. Make sure you understand the intricacies of the trading world and be prepared to deal with a significant amount of risk. If you’re not comfortable with price fluctuations or volatility, it might be best to reconsider trading. 

One of the first things you’ll learn in the trading world is that you won’t always be able to access the capital necessary for substantial returns. As such, you can get the opportunity for significant market exposure via the usage of leveraged products. In the UK, two options are particularly popular: contracts for difference and spread betting. They are fundamental for equity, index, and forex markets. And while their use cases are similar and share many of the same benefits, each has its unique advantages. But is there one that’s better than the other, or does it depend on the particularities of your trading profile? 

CFDs 

Contracts for difference, more commonly referred to as CFDs, are derivative contracts between financial institutions and individual investors. This contract allows you to take a position on the future of an asset for its value. This is similar to spread betting, which allows investors to place money on whether they believe market values will rise or fall. The differences between the opening and closing prices are cash-settled. While there’s no delivery of either physical goods or securities with CFDs, the value itself is transferable by force. 

Don’t mistake CFDs for future contracts. While they permit traders to deal in the price movements of futures, the similarities stop there. Contracts for difference don’t have expiration dates or preset values, but they trade like other securities, based on buy and sell prices. 

Spread Betting 

Spread betting is a type of leverage that allows traders to speculate on the movements of several financial instruments, including fixed-income securities, forex, and stocks. Since the speculation is tax and commission-free, you can speculate during both bull and bear markets. You don’t have to worry. You’ll be hindered in your trading process depending on the strength of the current markets, which is excellent news considering 2022 has been a bearish year for investors. And since the market winter doesn’t show signs of letting up anytime soon, looking into your options is a necessity. 

Spread betting works by enabling you to place a bet on whether you believe a market is set to expand or fall from the time your bet is accepted. You have the opportunity to choose how much risk you’re willing to take on this bet. And much like in the case of stock trades, you can mitigate risks by using stop loss or getting profit orders. 

The similarities 

When you’re a trader, you want to get the best solutions for your endeavours, so you’ll, of course, wish to add the best solutions to your strategy. So, what are some of the main similarities between the two? The first and most obvious one is that both are leveraged derivatives. Both have value deriving from an asset and are well-known alternatives to direct investments. As the trader, you have no ownership of these holdings, and you aim to speculate on future prices. Opting for a short selling position enables you to gain the difference between the opening and closing values if the asset decreases in value over time. 

If you’d like to do more in-depth research on spread betting vs CFD, you can click here to read more. You can get a better idea about the taxes and accessibility associated with the methods and the potential issues you must be aware of before setting out to commence a speculative trade. Both spread betting and CFDs come with additional commission fees and overnight costs. The use of leveraging during trading gives you increased exposure to financial markets. 

Advantages and disadvantages 

So, what are the pros and cons of each method? In the case of CFD, you trade on the margin, which provides higher leverage compared to traditional trading methods. The lower the margin requirement, the greater the potential returns for your trades. Generally speaking, there are fewer regulations associated with CFD when compared to other exchanges. The initial capital requirements can be pretty low, and you can start an account with as little as $1,000. 

In the case of spread betting, one of the main advantages is that you can speculate on falling markets. Depending on your requirements, you can choose between several order types, including: 

• Market orders: The trade is executed immediately at the current market price. 
• Limit orders: You can trigger the trade for a specific price, whether above or below current values depending on your choice. 
• Stop-entry orders: This method allows you to catch the momentum and enter a trade at a selected price. 

However, there are also some disadvantages associated with the trade. In the case of CFD, leverage can also magnify your losses. Price volatility and fluctuations can lead to substantial differences in spread trading ventures. The industry is not highly regulated, which can make you wary of giving it a try. It is also not allowed in some countries and jurisdictions. 

The disadvantages of spread betting, hedging isn’t guaranteed, and any losses you may incur are not tax deductible. You can only trade in the currency of your account, so all your transactions are in one currency, which can seem to limit some traders. There’s also no direct market access in spread betting, and there’s no model for corporate accounts. 

Ultimately, the choice is up to you. Before deciding which option works best for you, make sure you have done your research and understand all the potential risks associated with trading and its methods. 

Disclaimer: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when spread betting and/or trading CFDs. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

Tax treatment depends on your circumstances. Tax law can change or may differ in a jurisdiction other than the UK.

Marketing for CFDs and spread betting is not intended for US citizens as prohibited under US regulation.

The financial markets are infamously untrustworthy to millennials. This generation has been damaged by witnessing their parents endure the 2007–2009 recession. 

As they earn larger wages, millennials should embrace the stock market rather than shun it. 

And it's now simpler than ever for them to do so owing to new technologies and applications. If you persistently save and invest in the financial markets, compounding gains over decades have a tremendous impact on your financial situation. 

Investment Tips For Millennials

Millennials are avoiding traditional investing tactics in favor of digital alternatives like Cryptocurrencies, AIFs, and Mutual funds. To secure their financial future, they must also make wise investments based on their investment horizon and risk tolerance.

Given below are some elaborate tips for a safe and secure investment—

Set A Goal

Only invest in the stock market if you are saving for retirement or a down payment on a home. Instead, create a money market account, a certificate of deposit, or maybe a Treasury bond. Then, you only need to invest the time. 

There are many tools available to walk you through the fundamentals of investing. For example, a sensible amount to save is often thought to be 30% of monthly income. 

Depending on your preferences and objectives, this proportion can fluctuate. As a result, young investors may need more resources to engage a financial counselor.

You may find many materials on websites like Schwab, Fidelity, and Vanguard to assist you in creating an investment strategy.

Start Early

The ideal time to start investing is in your 20s, either during or shortly after you graduate. Investing early in life is because you develop a habit of financial independence and discipline. 

Early investment explains the true distinction between saving and investing. Regular contributions started at a young age can pay out handsomely in retirement. 

With early investments, the requirement for borrowing money from others dramatically declines. 

Saving for retirement earlier in life—in your 20s as opposed to your 40s—is always a good idea. However, the finest action one can take in their life is to start investing early. Yes, because you don't have enough money, it will be tough to invest early in life.

Diversify Your Portfolio

The appropriate distribution of long-term debt for a reliable, risk-free revenue stream and liquid money for immediate needs. According to financial experts, it relies on the individual's income and risk tolerance. 

Cryptocurrencies are also gaining ground among millennials with the rising number of online trading options. These platforms promote investment automation with guiding bots. If you are interested to know how these bots work, read more here.

Millennials prioritize appealing short-term returns above long-term financial plans, oblivious to the impact of volatility on overall investment returns. 

According to experts, the perfect asset allocation for millennials would include a combination of gold bonds, debt instruments, and stocks. 

Mutual funds are another option for investors since they provide a variety of strategies that aid in long-term wealth accumulation.

Plan Your Retirement

When you utilize IRAs and 401(k)s to save, you may take advantage of tax benefits. These accounts' conventional forms allow you to deduct contributions from your taxable income, which reduces your current tax obligation. 

On retirement withdrawals, you must then pay income taxes. These tax benefits may be very expensive.

The greatest option for financial stability is often a 401(k). Many businesses additionally provide match contributions, bolstering your account's balance when you make payments. 

When you save, it's like getting free money from your employer. You need to do so to save hundreds of thousands to tens of thousands of dollars.

Invest Your Surplus

Younger investors can take on more risks since they have more time to recover from bad decisions. 

No matter how you invest your money, you must choose how much you will lose. An emergency fund should cover costs for six to twenty-four months.

It's critical to check that your emergency reserve corresponds to your most recent yearly household cost. 

This would protect against the dangers of layoffs, unexpected medical problems, and accidents. Instead of investing emergency cash, they should be kept in secure, interest-bearing savings accounts. 

Generally speaking, only more knowledgeable and experienced investors should consider using leverage.

Get All The Help You Need

Many various kinds of specialists can assist you if you're seeking a financial adviser to aid you with investing. 

Others impose hourly or asset-based fees, while some make money by directing you to certain assets in exchange for commissions. Based on your unique requirements, you may select the best adviser for you.

Investing in the stock market can be tricky, especially if you don’t know what you are doing. Without a proper strategy, you will either lose a lot of money or gain even more. But, would you want to ride on your luck? Wouldn’t it be better if you had control over it?

It would. And that’s why I have created a five-step guide to investing perfectly in the market. In case you have something else to include, please comment below. I’ll certainly consider it.

How to Invest?

When it comes to investing, you should always keep your focus on a single space, especially if this is your first time. And make sure to follow the below-mentioned tips closely too -

1: Define Your Goal.

Ask yourself: why are you thinking about investing in the stock market? Do you want to get a lot of money from it and build for your retirement? Or do you want to save for the education of your kid? Is there something else you want to buy with the money?

The rule of thumb is not to invest a certain amount of cash that you might require in the next three to five years. And always make a long-term investment. A short-term option isn’t ideal.

2: Opt for the Right Stock.

Purchasing the right stock is much easier said than done. I mean, yes, if you research a little, it’ll show you whatever segment has performed well during the previous year. But what are the chances of it following the same this year as well?

When it comes to stock investment - there’s nothing you can be sure of at the beginning. So, it’s best to buckle up your belt and study every potential investment opportunity closely. The more you read, the easier it will be for you to choose the best stock.

3: Avoid Going for an Individual Stock.

Opting for an individual stock and investing all of your cash in it can certainly be rewarding. It will help you earn much more money than diversifying your project.

So, why am I asking you to avoid it?

When you’re putting all your money in an individual stock, you’re pouring all of your luck into it as well. So, if you win, you’ll get a massive amount of money. 

But if you lose, you’ll go bankrupt.

Due to this reason, diversification is important, even if you are investing in Cryptocurrency. It increases your chance of getting more money while lowering the risk of volatility.

4: Be Prepared for Anything.

Even if you have chosen the right stock and nailed the investment procedure, don’t expect to win big money from the get-go. Instead, be prepared to lose a little bit of money. 

Even diversifying your money can lead to a downturn sometimes. However, there’s no need to be worried about it. You can easily recover it as long as you are investing strategically.

In addition to this, no matter where you are investing, ensure that you are doing it through the right platform. For example, if you are delving into the oil market, always opt for an app that’ll offer an elaborate idea of the investment proceeding. If you are interested to know more about it, read more here.

5: Keep Track of the Financial World.

The financial world is changing pretty eminently almost every day. And if you want to make a career in this aspect, you’ll have to keep an eye on everything that’s happening. 

The better your knowledge is, the more efficiently you’ll be able to invest.

Usually, following a finance-based website will be enough in this aspect. But, if you want to dive deeper into the market, make sure to follow papers, newsletters, etc., too.

The Bottom Line

When it comes to investing in the current market, it’s best to be as careful as possible. Or else you and your investment might fall apart midway. 

No matter what it is you need to do, there’s an app for it. This rule applies to everything from dating to business, and the investment sector is no exception.
Investing apps have become increasingly popular over the past couple of years. Their appeal is easy to understand, in that they’re consumer friendly and have opened the markets up to ordinary people. We look at the factors behind their emergence and whether or not they’re here to stay.

An app for everyone

In our modern world, those looking for the best investment apps will find themselves spoilt for choice. There are so many out there that entire web pages exist to help consumers sort the wheat from the chaff. These review sites rank and rate options based on various factors, including platform fees and commission amounts.
There’s an option for everyone, and it’s a good job because according to the Financial Times, retail investors accounted for one-third of stock market trading in 2021. Those taking advantage of investment apps made up a sizeable portion.
The growth in retail trading undoubtedly goes hand in hand with the rise in investment apps. It, in turn, is explained by the pandemic. With more people at home in 2020, and most of them having additional time on their hands, many explored new pastimes. Investing, and the chance to create a secondary income stream appealed to many.
This new breed of inexperienced investors naturally required certain things from the platforms they used – first and foremost, easily accessible advice and the ability to learn on the go. Many also had less capital behind them than traditional traders, meaning they wanted to be able to trade at low volumes and with minimal fees involved.
Enter mobile apps, which did away with the need for brokers, banks, and the high costs that have traditionally come with the two.

A burgeoning market

If there’s one thing we can take away, it’s that the burgeoning popularity of retail investing apps is down to a perfect storm of factors. This has seen app usage increase from 35.6 million in 2017 to more than 150 million in 2021.

So, what have user-friendly apps and lower trading costs meant for the retail investor? Access to global markets for the first time. With the cost and complexity of traditional investing removed, it’s easier than ever for traders to invest in stocks and assets without the need for a middleman. This means even lower-income individuals can profit from trading in a way that simply wasn’t possible before.

According to Deloitte, this new breed of trader has a notably smaller bank account than previously – but that doesn’t stop them from being active on the markets. They’re also less reliant on professionals for financial advice.

While some remain uncertain of the long-term effects of this shift, our personal opinion is this: anything that improves access to the markets for the ordinary man or woman and puts us all on an equal footing can only be a force for good.

Small Business Investing: Opportunities, Risks, and Due Diligence 

There’s a new business in town, and everyone’s talking about it? Always consider the odds when you’re trying to decide whether or not to invest in a young company. According to research, 90% of startups fail before they make any profit. However, the remaining 10% who succeed are usually worth that kind of risk. 

Whether you’re a private equity investor, a venture capital firm, or something in between, the rules of investing are more or less the same – never miss an investment signal, and always do your due diligence.

Here’s everything you need to know before you embrace the risk. 

The Basics of Small Business Investing

Besides funding your startup, there are two other ways to invest in a small business. You can either lend your money to be returned with interest or buy a part of it for some percentage of future profits. 

You need to decide whether you will go with debt or equity investment. 

Debt investment doesn’t make you a partial owner of the growing company you’ve decided to fund. Whether or not the startup succeeds and starts making money or fails and bankrupts, a debt investor gets paid back an agreed-upon sum, traditionally the initial principal balance plus interest. 

If you decide that equity investment is a better option for you, funding a business will make you a key stakeholder. Depending on what you and the startup have agreed upon, you will either get a portion of its profits or a return on capital while also getting a say in how the business is run. 

The Small Business Investor’s Checklist 

If this is your first time funding a small business as a private investor or if you’re considering starting your venture capital firm, the following checklist will help you grasp the investment basics. Note that investment decisions require knowledge, experience, and instinct, so take your time to learn.

Discover New Investment Opportunities

First things first – how do you keep track of new investment opportunities?

We have two words for you – business insight. 

While business insight means different things to different types of investors, it ultimately encapsulates the entire well of knowledge you must possess before you can start making smart investments. That includes your understanding of entrepreneurship in general, relevant markets, and investment signals.

Successful venture capitalists get business insights and actionable data from multiple sources. Constant involvement keeps them in the loop with emerging companies and market trends and helps them track their progress. It takes a lot of networking and research – or a dedicated feed of promising businesses.

Make Sure the Investment Is Worth It

Second, an investor must always do their due diligence. 

In this context, due diligence refers to business insight, too, only more detail. Before you invest in any business, you must make sure the investment is worth it by looking at its future business plan, model, and strategy. As an investor, you need a holistic picture of the market, industry, and financial projections. 

Understand that Investing Implies Risk

Even with all due diligence, there’s always a certain percentage of risk that investors must count in. The biggest one, of course, is losing all the money. If the new venture fails, you might not be able to get your money back for years because your investment will stay illiquid, or you might not get it back at all.

That’s why investment experts always recommend diversification. 

In simple terms, diversifying your portfolio means making different kinds of investments. Your portfolio should include various types of markets, industries, and businesses. That way, if one of them fails, the chances will probably be more favorable for the other ones. Diversification takes a lot of experience. 

Pick a Small Business Funding Avenue

Both equity and debt investors have multiple funding options to choose from: 

●      Direct investments – approaching the business you want to fund directly;

●      Indirect investments – investing through a professionally managed fund;

●      Online investments – via crowdfunding and co-investment platforms.

When it comes to small businesses, the most frequently used investment avenue is the fund called SBA Loans (Small Business Administration Loans). However, there are other funds and ways to invest in a small business, too, such as credit unions and banks. You can even invest using your business credit card. 

Meet the Best Investment Candidates

Unless you’re a professional investor with a hectic schedule and a lot of experience, taking the time to talk to the entrepreneurs you want to fund is always a good idea. You should get to know the people behind the business plan and allow them to walk you through their assets and goals before you decide.

Negotiate Terms and Close the Deal

After carefully considering all the opportunities, risks, and options after you’ve done your due diligence and ultimately decided it was safe to make an official offer, don’t just start celebrating just yet. It’s important to navigate the negotiations well and go home with the best possible deal on your hands.

Stay in the Loop with Your Investment 

When you finally do invest, there’s no rule saying that you need to stay invested in the ups and downs of the business you’ve just funded. As a key stakeholder, you might get some control over the business or not. In any case, you shouldn’t shy away from being actively involved in its progress. 

Depending on how the wind blows, it might be a good idea to reinvest or flee.

Conclusion

Every first-time investor faces potentially ruinous temptations, and you will probably face them, too. Whether you take big risks and potentially reap big rewards or invest small and stay safe, due diligence is vital for success. Never underestimate the importance of insight and research.  

With typical investments, you will make a profit if they rise in value and lose money if their value falls. By contrast, if you choose to place spread bets, you are not buying anything, just betting on whether the value of that asset will go up or down.

The first step if you want to engage in spread betting is to set up an online account, ideally a demo account to practice, with a regulated broker. Then you could start researching markets and create your trading plan.

What are the major advantages of spread betting?

This type of trading is one that some people opt for because it has some interesting advantages. These are some of the main benefits that can accrue from placing spread bets.

 · The leverage is advantageous

 Trading on the financial markets conjures up images of ultra-rich people in high-end London offices buying and selling the stock for vast sums of money. That makes it seem out of reach for most people, but that is not the case with spread betting.

 The leverage involved in it means that the person placing the bet only has to put down a fraction of the value of what they are betting on to open a position. The money that you put down is referred to as the margin.

An example of how it works would be if you are betting on shares worth £1000 with a 20% margin. In that situation, a spread bet of £200 would need to be placed.

 That makes it an appealing way of trading for people who want to make their capital stretch. Bear in mind that both profits and losses are worked out according to the full position (£1000) rather than the margin (£200) though.

 · The tax situation is appealing

 More traditional forms of financial investment within certain sectors, for example buying shares in the stock of a company, will leave you liable for capital gains taxation on any profits that you make. By contrast, spread betting profits are exempt from this tax in the UK and Ireland, helping you to maximise your return from these bets. Note that tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

· Wide market access

 Spread betting is a unique way of trading in terms of the sheer number of markets that it lets you bet on. From commodities and indices to the foreign exchange (forex) market and stocks and shares, many brokers offer more than 10,000 different financial instruments to choose from.

 As a newbie trader, you have the option to stick with what you know or place your bets across a wide variety of options for diversification.

 · Profit potential

 Most forms of trading will only see you make money if the asset that you have bought or invested in rises in value. If its value decreases, you will lose money on your investment.

 Spread bets differ from this in that you are not investing in or buying the actual market asset. Instead, you are wagering on whether its value will rise or fall.

 Bets on the value rising are known as taking a long position, while ones, where you are betting on a drop in the valuation, are called taking a short position. What it means in practice is that you have two potential ways to profit from your trade rather than just one.

 What should newcomers bear in mind?

Perhaps the single most important thing for people new to spread betting to remember is that it is still possible to lose heavily. Furthermore, any loss will be worked out based on the full position, which is always higher than the margin that you bet.

It can be boiled down to this: should the market that you bet on rising 20 points in value, you will profit by 20 times what you bet. On the other hand, if you take a long position and the market drops 20 points in value, you will lose 20 times what you bet on it.

 There are plenty of plus points to spread bets that make them well worth exploring but it is best to practice with a demo account if you are new to the game. 

Spread betting is something that could be profitable and rewarding if you are careful to complete your due diligence and make efforts to minimise risk.

*Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when spread betting and/or trading CFDs. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

*Marketing for CFDs and spread betting is not intended for US citizens as prohibited under US regulation.

Consider The Type Of Savings Account

There are many different types of savings accounts, each with its own pros and cons. For example, a high-yield savings account offers greater interest rates than a traditional savings account, but it may also require a higher minimum balance. When choosing a savings account for your child, be sure to consider all your options and pick the one that best suits your needs.

An alternative to a bank savings account is a credit union savings account. Consider a Fresno credit union to open a savings account for your child.

Set Up Automatic Transfers

One of the best ways to save money is to set up automatic transfers from your checking account to your savings account. This way, you'll never have to worry about forgetting to make a transfer. Automating your transfers will also help you stay on track with your savings goals. Here is how to make the automatic transfer happen:

• Log in to your online banking account.
• Click on the "Transfer" tab.
• Choose the amount you want to transfer and the frequency of the transfer.
• Select your child's savings account as the destination account.

Incorporate Savings Into Your Child's Allowance

If your child receives an allowance, you can help them learn the importance of savings by incorporating it into their allowance. For example, you can have them set aside 10% of their allowance in their savings account. This will teach them the value of delayed gratification and saving for the future.

Help Your Child Set Savings Goals

It's important to help your child set savings goals. This will give them something to work towards and help them stay motivated. For example, encourage them to save for a new toy or a trip to the zoo. Once they reach their goal, they'll be proud of their accomplishment and be more likely to continue saving.

Match Their Savings

For every dollar they save, consider contributing an equal amount. This will help them grow their savings faster and make it more fun for them to save. Follow these tips to match their savings:

• Open a savings account that offers a match programme.
• Contribute to their account regularly.
• Encourage them to save as much as they can.

Teach Them About Investing

Investing is another way to help your child grow their wealth. But before you start investing, it's important to teach your child about the basics of investing. This includes understanding how stocks work, the different types of investments, and the risks involved. Once they understand these concepts, the next step would be to invest in a child's brokerage account.

Review Their Savings Progress

Regularly reviewing your child's savings progress will help ensure they're reaching their goals. It will also allow you to adjust your savings plan if needed. You can review their progress by logging into their account and checking their balance regularly. Take this step with them, so they can also see their progress.

Follow these tips to review your child's savings progress:

• Check the account balance regularly.
• Look at the account history to see how much has been deposited and withdrawn.
• Calculate the interest earned to see how their money is growing.
• Set up alerts to track their progress and stay on top of their account.

Encourage Them To Save For A Rainy Day

The importance of saving for a rainy day means setting aside money in their savings account for unexpected expenses, such as a car repair or medical bill. Help them understand that it's important to set aside this money so they're not caught off guard if an unexpected expense arises.

Help Them Open A CD

A CD (certificate of deposit) is another type of savings account that offers a higher interest rate than a traditional one. CDs typically have a fixed interest rate and require you to keep your money in the account for a set period. When the CD matures, you can withdraw your money or roll it over into a new CD. 

Here are the steps involved in opening a CD:

• Choose the type of CD you want.
• Decide how much money you want to deposit.
• Select the term length.
• Choose the interest rate.
• Open the account and deposit your money.

Start A 529 Plan

A 529 plan is a tax-advantaged savings plan that can be used to save for college. With a 529 plan, you can make after-tax contributions, and the money will grow tax-deferred. 529 plans are offered by states and educational institutions, and there are two types: prepaid tuition plans and college savings plans. 

Prepaid tuition plans allow you to prepay for tuition at participating colleges and universities. College savings plans allow you to save for qualified education expenses, such as tuition, books, and room and board. With both types of 529 plans, you can use the money tax-free for qualified education expenses. 

Be Patient With Them

It takes time to develop good financial habits, so don't expect them to become experts overnight. Instead, focus on teaching them the basics and helping them grow their savings over time. Saving money is an important part of financial planning, but it's not the only thing to consider. As discussed above, help them understand the importance of budgeting, investing, and credit so they can make well-informed financial decisions when they're ready.

Final Word

Saving for your child's future is a smart way to help them reach their financial goals. By following these tips, you teach your child the importance of saving and help them build a solid foundation for their future.

Retirement should be a time to enjoy yourself. You shouldn’t have to wonder whether you’re going to get hit with surprise fees or that you’re going to be charged a penalty for accessing your annuity too quickly. Annuities can be great retirement vehicles but there are things you need to avoid when purchasing them. You just need to know when you’ve found the right annuity quote that fits your retirement needs. 

In this article, we’re discussing the things you need to consider while buying an annuity. Following these instructions will help you prepare for retirement with a clear conscience about the road ahead for you. Continue reading to learn all there is to know about what to avoid when it comes to annuities. 

Investing Too Much Money 

Annuities can be a great source of lifetime income, but they can also be inflexible. Immediate annuities typically pay out more interest than CDs and fixed investments. However, to get the extra money for income, you have to give control of your money to the annuity manager. That’s why advisors typically only advise you to put 25-30% of your assets in immediate annuities. 

Picking The Wrong Type Of Payout 

If you choose an immediate annuity, a single-life payout version will afford you the highest annual payout. In a single-life immediate annuity, your payout stops when you die even if your spouse is still alive. If you want your annuity to take care of your spouse, you might be better off taking an annuity that features a lower payout but continues for their lifetime. 

Not Comparing The Type Of Payout Amounts 

Immediate fixed annuity payouts are easy to compare. You simply determine how much you’ll receive each year for the amount you invest based on your age and the type of payout you select. However, there can be a wide range of payout amounts depending on the company you choose. You can work with an insurance broker or annuity company to compare payouts for several insurers. 

Picking The Wrong Type Of Payout Guarantees 

Instead of an immediate annuity, you can choose a deferred variable annuity with payout guarantees. You typically buy these types of annuities around ten years before you retire. These annuities let you invest in accounts similar to mutual funds and they can increase the amount of interest earned in your annuity. You will have to pay for guarantees on your principal in these annuities and the guarantees tend to cost around 0.95%-1.65% of your investment per year. 

Annuities with guaranteed minimum benefits require you to annuitise your account in order to receive the promised lifetime income. This means you will eventually need to convert the account to an immediate annuity and give the annuity company control of a lump sum. Annuities with guaranteed minimum withdrawal benefits pay income for life based on your initial investment. They can also increase your guaranteed payouts based on the highest point of your investments. However, they will usually pay less than the guaranteed minimum benefits. 

Switching To Another Type Of Annuity And Giving Up Valuable Guarantees 

Older versions of variable annuities with payout guarantees often promise a certain amount but take 6% of your guaranteed amount every year. Newer versions often cap guarantees at 5%. Your guaranteed value can also be much higher than your actual account value. In a down market, these types of annuities become more valuable. 

If you cash out the annuity or switch to another one, you’ll only get to take the actual account value rather than the guaranteed value. You may also have to pay a surrender charge of 7% or more if you change your annuity within the first seven to ten years.

Withdrawing Too Much Money 

Variable annuities with guaranteed minimum withdrawal benefits typically let you take out 5%-6% of the guaranteed total value each year. If you take more than that, you might risk your guarantee. Before withdrawing more than the permitted amount, you should find out how the extra withdrawal will affect the guarantee.

Ignoring The Lender’s Financial Strength Rating

No matter the type of annuity you get, you’re counting on it paying out for the rest of your life after retirement. That could mean that you’re relying on the annuity for twenty or 30 years after. Choosing a company with a solid financial foundation rating is essential. You should choose from insurers who have A ratings or better if you want the best annuity products for your retirement. 

Not Paying Attention To Fees

Haste is never a good idea when it comes to choosing your annuity product. Your guaranteed stream of income can be costly when you don’t perform due diligence. One of the biggest mistakes an annuity shopper can make is failing to understand all of the associated fees with their product. Most financial products have associated fees, charges, and commissions. 

The most common fees are mortality and expense fees, administrative fees, and surrender charges for withdrawals. Regardless of the types of fees associated with your annuity, you must understand all of them if you want to be confident when buying your annuity. Understanding the annuity in its entirety will help you compare annuity products thoroughly.

Communication Breakdowns

Because annuities can be complex, it’s easy to get lost and make a quick decision if you don’t have the right annuity consultation. With terms such as fixed vs. variable, immediate vs. deferred, and qualified and non-qualified funds, it helps to have a trusted advisor at your side to explain everything. When you don’t choose the right annuity for your unique situation, you probably won’t get your intended payout. 

Conclusion: What To Avoid With Annuities

Annuities can be excellent financial products for your retirement plan. But as with any other financial decision, their outcome depends on how thorough you are with your planning. If implemented incorrectly or hastily into your retirement portfolio, annuities can quickly cause more harm than good. Because there are a lot of contributing factors to annuities, you should consider consulting an annuity professional to walk you through the best annuities for your situation. These professionals will be able to guide you to the best annuity for your preferences so you can enjoy your retirement to its fullest. 

In the first half of 2021, NFTs generated a whopping $2.5 billion sales and it’s no surprise considering digital artists such as Beeple jumped on the bandwagon, selling an NFT of his work for a massive $69 million.

With the popularity of NFTs - and for that matter, the opportunities associated with NFT trading - showing no signs of decreasing, more and more people are looking to get involved. But, due to the complexity and newness of NFTs, many have no clue where to start.

Brad Wilson, CEO of NuPay Technologies, talks to Finance Monthly to offer a complete guide for those looking to get started with NFT trading.

Step One – Educate Yourself Completely on What NFTs are

The media hype around NFTs has got most of us excited – the thought of being able to bring in additional revenue following two years of economic uncertainty is music to our ears. But you shouldn’t let the attractiveness of NFTs cloud your vision. You need to commit time and energy to understand exactly what NFTs are or there’s little chance of success.

What are NFTs? NFTs are basically digital collectables that have been transformed into verifiable assets so that they can be traded on the blockchain. They are tokens that people use to represent ownership of unique items and often involve intellectual property rights, though it’s important to note that this isn’t always the case.

They are called non-fungible tokens because they represent things that have unique properties and therefore are not interchangeable for other items. For example, some of the most popular NFTs right now are:

• Digital Artwork/Music
• Items in online games shops
• Domain names
• Celebrity tweets
• Essays
• Domain names

Whilst they can be used for almost anything with a unique property, they are most popular amongst those in the creative and entertainment sectors.

Don’t worry if you’re not operating in those sectors though, it doesn’t mean NFT trading won’t work for you.

Step Two – Identify What Type of NFT Trading is for You

NFTs have a huge gambit. The possibilities are endless and the NFT marketplace is adaptable to so many different mediums and contents of life – there really is no real limit.

That being said, it’s not for everyone. Before you even begin ‘giving it a go’, you need to identify whether you can and want to commit to it, and in what way.

There are three main types of NFT trading you can be involved with:

1. Buying and Selling NFTs

This is realistically one of the simplest and easiest ways to get started with NFT trading. It requires little time from your end as you are trading already developed digital assets rather than developing your own.

A point worth noting here is that you’ll need to be familiar with how cryptocurrency works. NFTs are purchased via specialised marketplaces online using funds from your digital wallet - there are a few marketplaces out there that allow flat purchases or credit cards, but they are few and far between. This means you’ll need to not only create a digital wallet that supports NFTs, but you’ll also need to be prepared to fill it with cryptocurrency ahead of your purchases.

You can buy and sell NFTs online via specialist marketplaces or apps. There’s a new platform coming soon, PRISM, which is also a great marketplace for artists to trade and they accept cash - credit cards are on the horizon too.

Remember, all transactions are recorded on the blockchain and only once the sale is verified will the NFT appear in your wallet.

2. Purchasing NFTs as an investment

Though purchasing NFTs without the intention to sell isn’t necessarily a direct form of trading, it’s still an option for building up a digital asset portfolio - and one which might be more suitable for those who want to dip their toes into the market before going full steam ahead.

Although no one knows what value an NFT will have over a period of time, there are a few research methods available to the investor which can help decide which NFT to buy. Community is a big factor for some. You may want to consider whether the community is organic and whether they care about the project.

Another consideration is who created the NFT. Is it an anonymous individual or organisation? Is it a reputable brand or a famous artist? Do the developers have transparent and realistic plans for the project? Conducting due diligence is crucial to avoid scams and rugpulls.

A few other things to consider when purchasing NFTs with no intention to immediately sell are:

• Is it a 1/1 piece of art by a world-famous artist?
• Are you buying the rights and royalties to a famous musician's song?
• Are you buying virtual land which enables passive income streams?
• Is it one edition out of a million NFTs distributed free by a globally recognised brand?
• Does the NFT come with exclusive perks such as entry to private events or access to future NFT sales?

3. Creating and Selling NFTs

Creating and selling NFTs isn’t one to approach lightly. Yes, it can be very profitable, but it doesn’t come without understanding the market and knowing exactly what to expect.

You’ve heard the saying “if you fail to plan, you plan to fail” right? Well, it’s even more true in the world of NFT trading. The first place to start with planning is documenting the type of NFTs you are able to and want to create and sell. From here, you’ll be able to identify what capacity you have to create them and how many, on average, you can create and sell each month.

Next, goal setting. Everyone loves goals and science has proven they are effective in helping us stay motivated. Just remember, it’s likely that if you’re a sole creator, you’ll need to be involved in the creative process, delivery and bookkeeping, so you’ll need to keep your goals to a manageable standard.

Lastly, research your audience and which NFTs are selling well at the moment. Just like with any business, having an audience and market research to hand will aid your business’ development.

4. Choosing the right software for NFTs

Depending on your goals, it could be worth investing in some software. If you do plan on creating more ‘classic’ style art, for example, looking into software that allows for photoshopping, animations, and graphic design could benefit you. However, if you are looking at working in the metaverse or creating video game assets you would be better off looking at different software. Many current software providers are expanding their services to include the NFT space, for example, Adobe, who are launching new NFT functions within photoshop.

If this is something you are unsure about, there are learning platforms everywhere. Taking a Masterclass, or simply watching some YouTube videos can help you disseminate what will work best, and it will also help you broaden your knowledge.

In terms of trading NFTs, you shouldn’t need any pieces of software to successfully do this. The same goes for creation of NFTs - you don’t need additional software to be successful.

Step Three – Understand Your Tax Responsibilities

When it comes to tax responsibilities surrounding NFTs, many fail to understand exactly what they need to declare. As a result, taxes are largely unrecorded. Though in the US, officials are slowly working towards keeping track of all of this, it’s still heavily reliant on the individual person to keep close records on their dealings.

The bottom line is, digital currency is still money that you possess. And as NFTs use cryptocurrencies and are recorded via the blockchain, they are reportable transactions that need to be declared.

The best way to get a grip of the situation is to manage the record-keeping and organisation of trading from the very start. You have to be organised and you have to have a plan in place to keep track of your incoming funds and outgoing funds. It’s critical to note all the income you’re generating, costs that you’re incurring - from minting fees to listings to logistics - and also wider development costs that you may have internally.

NFT tax payments are part of a new landscape. The good thing is that NFT marketplaces are taking steps to assist, offering solutions that support tax filing and providing information on what’s required for tax filing. You see, NFT marketplaces are trying to be as compliant as possible with government regulations, contrary to popular belief.

Be Prepared for Challenges

It’s vital when first starting out that you manage your expectations and prepare yourself for the challenges ahead.

About the Author

Brad Wilson is the Founder and CEO of NuPay Technologies. With over 30 years of investments experience and the FinTech landscape, he is now driving professionals to pave the way in the blockchain industry. He has grown Climb Investment’s portfolio year after year, and NPC has become one of the largest card processing companies in the state of Ohio under his leadership. Now at the helm of NuPay Technologies, Brad has enlisted a spectacular team of like-minded, driven professionals to deep dive into the world of blockchain technology and NFTs!

As I write this we are already well into the new year and it’s becoming clear 2022 has a very different outlook from last year when the “everything rally” was fuelled by easy money, ongoing COVID recovery and mitigation spending programmes, the market’s belief central banks would act to avoid any market instability from derailing sentiment, and COVID uncertainty.

 This year has opened with a much clearer perspective on how quickly central banks will act to address inflation, normalise rates and unwind the quantitative easing programmes that juiced markets with liquidity over the last decade. Welcome back to grown-up markets!

The critical uncertainties are how destabilisation rising/normalising rates become, how inflation – “transitory” or “persistent” – develops (and the danger it morphs into stagflation), and how quickly the global economy puts COVID-19 behind it to start growing again. That leaves geopolitical tensions over Ukraine and with China as the other known unknowns.

My tech valuation stupidity indicators – ARK, Bitcoin, Tesla - opened the year into negative numbers suggesting fundamental analysis is coming back into vogue.

In short, investors are going to have to think hard about what this market is telling them through 2022. The game is changing. One aspect I expect to change dramatically is “euphoric” market sentiment – the everything rally fuelled speculation to supercharged irrational levels. As a famous boxer never said: “I go into the fight prepared with a plan to get rich – which I stick with right up till I get punched hard in the face”.

Sentiment, especially towards get-rich tech scams, is changing. My tech valuation stupidity indicators – ARK, Bitcoin, Tesla - opened the year into negative numbers suggesting fundamental analysis is coming back into vogue. To be fair, Morgan Stanley disagrees with me on Tesla – predicting a rally to $1400 on the back of improving numbers and it’s already on the final lap of the EV marathon when everyone else is still tying their shoelaces… really? I predict everyone could be making decent EVs within a few years. But they won’t be… and to find out why, keep reading.

I would never grace my market haverings with the legitimacy of being “predictions” but let’s run through some ideas for the coming year.

Stocks

Inflation is nailed on – which is perversely good for stocks on a relative basis. The upside will come from higher corporate dividends as the globe recovers from COVID. Sound stocks which will continue to beat risk-adjusted bond returns. But it will be a selective market – distributable profits matter as rates rise, spelling a crisis for the tech sector where unprofitable firms telling the pursuit of size over returns will struggle. In a rising rate environment, fundamental value stocks will outperform. I’m also expecting an ESG backlash to benefit the detest oil majors as energy shortages in Q1 trigger a fundamental review of climate change transition, and the acknowledgement we can’t dump gas overnight and expect the global economy to keep working.

If we assume the global economy stages a covid recovery I’d expect a knew jerk Q1 market rally, before rising rates and lower liquidity sees a pretty flat second half.

Consumers

This is not going to be a good year for consumers - tax rises, massive increases in energy bills, inflation of food, accommodation, and modern necessities like Netflix will dramatically hit discretionary spending. Wages are likely to remain sticky for most workers, unless they are prepared to move into the more challenging sectors like service, entertainment and logistics where wages are rising. Issues like consumer exposure to interest-free debt (like Klarna) could prove “interesting” – if discretionary spending falls, then so will the amount of consumer free-cash to service debt.

Inflation

Forget transitory – that’s a 2021 expression. Supply chain bottlenecks triggered inflation – but they have themselves spawned significant consequences. We’re now seeing higher wages and supply chains evolving. Energy prices will hoick inflation. While 6-7% inflation rates will characterise the early part of the year we may see moderation to 4% later – but that will be remained sustained as the economy adjusts and finds a new equilibrium at a higher permanent inflation rate.

Bonds

The market now expects the Fed could hike four times this year. The Bank of England has already hit the button. Rising rates mean a bad year for bonds – but remember they are also the ultimate safe haven if markets snap. We’re likely to see an acceleration of corporate defaults which have been artificially low for over a decade due to ultra-low rates allowing unfit companies to survive – and that could get very messy due to terminally dismal liquidity in bond markets – which will set like concrete when the selling starts. Corporate spreads will widen – and the markets will have to relearn the fundamentals of credit strength.

Crypto vs Gold

No contest. Gold will win. Crypto enthusiasts can argue gold is as destructive to the environment as Bitcoin. Really. But it’s also real. Bitcoin isn’t.

Energy

2021 demonstrated the dangers of Energy Sovereignty. Without it, nations are vulnerable – as Europe is finding out. Ensuring sufficient stocks of energy – particularly oil and gas – will become paramount. ESG concerns will be dismissed as it becomes clear the optimal routes to Net Carbon Neutrality by 2050 depend on a phased approach with gas replacing coal before gas can be replaced itself. The likelihood is for oil and gas prices to remain elevated through 2022.

Renewables

Will 2022 be the year the world wakes up to the fact wind and solar might be marvellous in terms of fooling the people we’re greening the planet? They are the least efficient source of power, more expensive than expected to maintain, but can achieve easy funding at tight levels because every institutional investor wants to show off how green and ESG compliant they are by holding renewable assets. A better route to zero carbon involves a much wider range of non-CO₂ emitting, but more “difficult” energy sources such as tidal, nuclear and clean gas, and mitigants like reforestation and better waste carbon sequestration. These are all achievable – but difficult. Nuclear fusion – will remain a tomorrow solution. I haven’t mentioned hydrogen – because it’s far more difficult than folk expect.

EVs

A world where Rivian made 1400 cars in 2021 but is worth more than the German auto sector has never made much sense. It makes even less when we appreciate that every single EV on the planet today is based on lithium batteries. Lithium is a nasty, dirty dangerous element that will kill us all if it leaks into the water table. Whatever Elon Musk says, it is very difficult to recycle. If we are going to make 35 million EVs by 2030, then we either mine every single atom of it on the planet or hope that a friendly asteroid comprising pristine lithium and cobalt makes a soft landing (as it didn’t happen in the film “Don’t Look Up”). Otherwise – we probably need a rethink on EV power – soon!