Building a Retirement Portfolio and Integrating CFDs

11 Jan Building a Retirement Portfolio and Integrating CFDs


barca-473854_640No matter your age it’s always a good idea to start building a retirement portfolio and CFDs are one investment well worth integrating into your plans for older age. There is no capital gains tax payable on profits from CFD trading, so successful traders can use profits to enhance the retirement portfolio even further. What’s more it is possible to make gains from shareholdings that may be dropping like a stone, CFD trades allow customers to bet on shares that will drop as well as shares rising in price, this means any losses from a current share that’s dropping price could be mitigated by gains made by CFD trades.

Like all investments CFDs are products that need a learning curve, so signing up for a demo account with CMC Markets is one way to ensure your education is assisted. You’ll find navigating their CFD platform is an easy matter and it won’t be too long before you develop the confidence to jump into your first trades.

It’s important to develop a strategic investment plan at the stage you’re trialling out a dummy CFD account, because one of the worst things you can do when trading CFDs is to start relying on gut instinct or chasing losses with riskier deals. When planning your investment strategy consider one golden rule that needs actioning by any shares dealer which is to let profitable trades run and cut losses immediately on trades that are starting to lose. It seems a simplistic rule to follow, yet it’s amazing how many traders will continue holding onto losing deals in the hope they will turn around. You can expect to ride out some losses during your trading career, sticking with your investment strategy should help you minimize losses and build profits once more.

When you have built up funds within your CFD account, the best way to ensure losses are minimal is to limit any one trade to a maximum of 2 percent of your total capital. That way, no single deal can ever wipe out a large proportion of your capital. Also traders that diversify on deals are more likely to build a substantial retirement portfolio over a matter of time. For example, if all your deals are within the energy sector then any global economic or political news can cause an impact on prices. Bad news for the energy sector could cause losses across your whole portfolio if all your dealings are based in that sector.

Building your retirement portfolio means taking out a complex range of investments over time. It usually takes several years, even decades, to build up strategic funds for retirement. You should look towards property investments, stocks and shares and also utilising services provided by brokers, such as CMC Markets. As stated previously one of the greatest advantages of CFDs for investors with a variety of investments is the ability to cut out capital gains taxes on profits. The other prime advantage of the CFD trading market is the ability to bet on stocks that are dropping in price, allowing you to minimize losses on shares you already own.

Fees and charges also play a big part in building successful portfolios for retirement and one more great advantage of a broker like CMC Markets is the flat rate fee structure and the loyalty scheme which gives cashback to customers.

Keeping a watchful eye on investments is important for canny investors. Any trade can turn from profits to losses in seconds, and it’s easy to lose money on investments if you don’t follow the markets on a daily basis.

Photo courtesy of: Farrokh_Bulsara

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