Long term investing on IG

Forums ProRealTime English forum General trading discussions Long term investing on IG

Viewing 5 posts - 1 through 5 (of 5 total)
  • #152223
    J.

    I’ve been successfully trading with IG for the past year and I like the broker very much. I think most people here also use IG for trading, but I was wondering if anyone uses it for long-term investing.

    I want to create a long-term investment portfolio that I can hold and add to for for the rest of my life. I calculated my margin and max losses if the entire portfolio would go bankrupt or drop 60% in price, which is unlikely, but I always like to prepare for the worst. I calculated that I wouldn’t get into margin call territory until the portfolio would drop with 51.6%, but I could also reduce the sizes so I can take even more drawdown without getting called out.

    Big reasons for using IG for me would be that with the margin I can get more shares for a more diversified portfolio. Also if my portfolio grows overtime I’ll still have money in my account to buy more shares with leverage.

    However I could also use a broker like Degiro which doesn’t use leverage on stocks, but where I also can’t get margin called out. However my portfolio would be smaller and all my money will be tied up in the stocks.

    Are you using a leverage broker like IG for long-term investing, or do you use a broker without leverage? I’d like to hear your experiences.

    #152238

    Buying stocks with leverage is mathematically identical to buying stocks on credit. So be careful. Interest for your stock credit is called “overnight cost” with IG.

    1 user thanked author for this post.
    avatar J.
    #152244
    J.

    Thanks. I indeed saw they had overnight costs on their website.

    #152345

    Futures with automatic roll over enabled

     

    #152347

    Spread betting and trading CFD’s is a short term way of betting the market. Overnight fees can make this a very expensive way of long term investing/betting. Long term investing is better done by buying a stock or a range of stocks (usually via exchange traded funds) through a broker and paying a fee to buy and a fee to sell for each of them. Managed funds to do this for you come with additional fees that can make them a very long term hold and not necessarily perform any better than doing it yourself via ETFs.

    My point is that there are many investment tools and spread betting is not a cost effective one for long term investing.

    My best ever long term investment was buying a market via an ETF several years ago both for the gain in value and the dividends. My best ever short term investment was via spread betting markets for a few days.

    Investing is like engineering – you need to choose the right tool for the job… and if you don’t know how to use the tools then pay someone else to do the job.

Viewing 5 posts - 1 through 5 (of 5 total)

Create your free account now and post your request to benefit from the help of the community
Register or Login