Five reasons why ETFs make the ideal tool to trade indices

Julie Brownlee, Fsp Invest, 22 Oct. 2014

Tags: etfs, exchange traded funds, cfds, trading etfs with cfds, invest in etfs, index trading,

If you want to trade indices, exchange traded funds (ETFs) make the ideal tool to do just that.

You can benefit from the performance of indices using ETFs. And if you’re not content with straight market gains, you can magnify your potential gains by trading contracts for difference (CFDs) on ETFs.

Let’s take a closer look at why you should considering investing or trading indices using ETFs…

Why invest in ETFs?

#1: ETFs allow you to easily invest offshore without changing a cent

Through trading ETFs, you can invest in a number of the world’s major indexes. This includes the FTSE 100 of the London Stock Exchange.

And you can do all this without moving any of your cash offshore. This means you stand to benefit from protection against rand volatility.

#2: You stand to gain from the index’s performance when investing in ETFs

By investing in ETFs tracking indices, the performance of your ETF will reflect that of the specific market index.

With the low costs associated with investing in ETFs, if the index rises 5% in a year, your investment will also mirror this rise.

#3: Investing in ETFs takes the guesswork out of picking shares

Many investors are put off picking individual stocks in case they get it wrong. It also requires a lot of research and analysis to make good stock picks.

Investing in ETFs takes these issues away. You just have to select what index you want to invest in.

#4: With ETFs, you’re not limited to shares

As well as being able to invest in different indices, there are other financial instruments besides shares you can gain exposure to.

These include government bonds, gold and platinum

#5: You can gear up your returns and go short ETFs

If you want to boost your potential returns you can trade CFDs on ETFs.

By doing this you can magnify your potential gains (and potential losses). And it gives you the chance to profit if an index is falling in value.

So there you have it, five reasons why ETFs make the ideal tool to trade indices.

*********** Advertisement ************

PS: I hope you were able to be at the FSP Invest Symposium: Start NOW, Retire RICH, this Saturday

If you were, you were privy to a diverse range of views and ideas on how to protect your personal financial future.

If you’re missed it though, don’t worry. We recorded the entire conference for you… so that you can ‘eavesdrop’ on these elite investment ideas at your leisure.

You can access the whole thing right here.


Related QA

ampieterse asked:
I am currently making payments into ABSA's NewGold directly however, I needed to open a Cheque Account in order to manage the ETF payouts. Is the [read more]
Published at 15 Aug. 2016 in: ETFs Absa etf vs easyequities etf 1 Answer
Maccers asked:
Hi there, a few years ago in an issue of Unconventional millionaire you suggested a good split for ETF's on a monthly contribution was the [read more]
Published at 14 Jun. 2016 in: ETFs Etf sa 1 Answer
johnnypi10 asked:
Hi Francois, I bought the ETN (SBAPD1, also called SBADAUG20) 3 years ago and have never seen the price fluctuate like it does the past month. The [read more]
Published at 17 May. 2016 in: ETFs Etn's 2 answers
daniel.lubbe.10 asked:
Hallo Francois. In your April Newsletter" The R2.66 million Retirement Blueprint you've mentioned RMB Top 40 and RMB Mid Cap. These 2 ETF's don't [read more]
Published at 06 Apr. 2016 in: ETFs Rmb vs ashburton 1 Answer
janse van rensburg9679 asked:
Hello, Would you please advise where can I buy this ETF? I checked with etfsa but they don't have it in their portfolio... [read more]
Published at 30 Mar. 2016 in: ETFs 1 Answer

Related articles:




Youtube Twitter Facebook

Connect with us:    

  • Accelerated Investor
  • Accessories
  • Accountancy