In a few words I’d like to explain why I chose to place Bullionvault and Plus500 ads on longtermtrends.net. I only recommend services that I use myself. However, as I’ll outline in the following, I use them for very different purposes.
- Bullionvault is the largest online investment gold service and it holds over $2 billion dollars worth of clients assets, which is the largest stock of privately held bullion in the world.
- Bullionvault stores the bullions in the most politically secure places in the world. They have vaults located in Zurich, London, Toronto, Singapore and New York.
- You can withdraw your physical precious metals.
- Bullionvault has very competitive fees for trading and storing your physical bullion.
- With ETFs (Exchange Traded Funds) and Futures you never know whether you actually own the gold or whether you just own a claim together with X other people on one specific bullion. For example, the COMEX and CME gold exchanges only hold a tiny fraction of their trading volume in physical bullion available for actual delivery. Exchanges can go broke and they have in the past. Many gold derivatives simply mimic the COMEX-price and when the exchange goes broke, these derivatives will lose value.
- In a true crisis, physical gold & silver is really the asset that you’ll want to own. ‘Paper-gold’ is issued by financial institutions, which go broke all the time. You don’t want to depend on the banking system, which has been on the verge of collapse many times in the past 100 years.
In summary, I recommend Plus500 for the short-term speculator. I use it for practicing (with the free demo account), checking prices on almost every financial asset that you can find, and short-term trades. Here are some notes on Plus500:
- Longtermtrends.net is all about the long-term. If you are a long-term macro investor Plus500 is probably not right for you.
- On Plus500 you buy and sell a CFD, a Contract For Difference – you don’t actually buy and sell the underlying asset (such as a stock). A CFD is a contract between you and the broker (in this case Plus500) whereby differences in settlement are made through cash payments.
- On Plus500 you can trade CFDs with over 2,000 instruments (Shares, Indices, Commodities, Forex, and ETFs) across over 20 different markets worldwide.
- They have a great mobile app and good usability, which makes trading very convenient.
- Plus500 is available in more than 50 countries and 32 different languages
- On Plus500 you can also open a free demo account, try it for yourself, and see if it’s right for you.
- Trading CFDs has several advantages:
- Attractive leverage: The maximum leverage is 1:30. In other words, it is possible to buy a CFD on a $1000 asset (such as a stock) with a deposit of only $33.34.
- With CFDs you can go long or short stocks and indices.
- Since you don’t actually buy and sell the underlying asset, you don’t pay commissions on your trades. This can make executing short-term trades very affordable. In fact, it’s the cheapest way for my purposes.
- However, CFDs also have some disadvantages that you must be aware of:
- CFD brokers make money on spreads that are on average slightly larger than in the actual stock market. Therefore, whenever you buy something, you pay slightly more than the spot price of the underlying asset – and whenever you sell, you get slightly less.
- CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
- Having to pay the spread on entries and exits eliminates the potential to profit from small moves.
- High leverage magnifies losses when they occur, and having to continually pay a spread to enter and exit positions can be costly when large price movements do not occur.
- With CFDs you pay an overnight fee on positions that you are holding. Therefore, it is no suited for long-term investors. In the absence of capital gains, every position will eventually go to zero.
- Since you don’t actually own the the underlying stocks, you don’t get voting rights (or any other rights/obligations).
That is all. Be save, be smart, do your own due diligence, do your own research, don’t mortgage your house to speculate, and trade responsibly.