Investing Guides for 2021

We found 11 online brokers that are appropriate for Trading Investment.

Investing Guides Guide

Updated June 11, 2021

Investing Guides

Throughout this article, we will tell you a lot about investing. There is still this perception that goes around that investing is for the elite and that if you started investing your money today, you would not know where to begin. Thankfully this perception is outdated now as the advent of the internet has led to a position where anybody can invest their money and make good returns.

This easy nature of investing does have its downfalls though. Investing is not for everyone and if you start investing without understanding the consequences of your actions you could be in a lot of trouble. Every day we see people post questions asking for help and we are left in disbelief that someone can spend a large amount of money without knowing exactly what they are getting themselves involved in. Making money can be easy but losing money is considerably easier.

What Is Investing?

Investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. This can be done by investing in stocks, commodities, or Crypto. Technically you could invest in numerous things, For example, many invest in real estate as it is a great way to realize profit over many years due to inflation but for the purpose of this article, we will focus on these three things.

Stocks represent the most traditional form of investing and are perhaps the easiest to understand. If you were able to invest in a company like Amazon in its early days you would have made an insane profit by now. This is an extreme example as these kinds of investments are what dreams are made of.

There are, in actuality, seven of the most asset types that anyone can invest in, and the most common out of these include bonds, real estate, stocks, and commodities. There are also funds such as exchange trade funds (or ETFs) and mutual funds that help invest in the different combinations of these assets. When you invest in such funds, you are actually investing hundreds or thousands of assets. To put it in further detail, following are the several types of investments:

Stocks

Corporations sell their stock to gain revenue to support their business operations. Investing in stocks gives the investors partial possession of a corporation and lets them benefit from its profits (even the losses involved). Some shares also offer bonuses, i.e., small consistent payments of the corporation’s gains. The owners of a corporation’s stock are called its shareholders.

Since returns are not always guaranteed and private companies are at a constant risk of going out of business, some stocks are accompanied by greater risks compared to some other kinds of assets.

Bonds

Bonds allow shareholders to 'act as the bank'. When corporations as well as countries need access to raised capital, they take loans from shareholders by issuing arrears referred to as bonds.

When an investor invests in bonds, they are actually lending money to the bond issuer for a fixed amount of time. In exchange for the investor’s loan, the issuer then pays them a return at a set price along with the money initially loaned to them.

Due to their guaranteed returns (that are fixed rates), bonds are also referred to as fixed revenue investments. These come with less risks when compared to stocks. That is also to say that not all bonds are secure investments, however. Companies with bad credits often issue bonds as well, which means that they might attempt to neglect their repayment.

Commodities

Commodities are classified as energy products, agricultural products, and metals (precious metals included). These resources are usually raw materials utilized by industries. Their prices are reliant on market requirements. For instance, if a flood negatively impacts rice supply, the price of rice may rise as a result of shortage.

Investing in tangible commodities means investing in quantities of wheat, oil, and precious metals like gold. This is usually not how investors go about investing in commodities, as you may be thinking. Investors, on the contrary, invest in goods utilizing futures and options agreements. You can also buy commodities through other securities such as ETFs. You can also invest in the shares of companies responsible for producing commodities.

True to their nature, commodities are quite risky investments. F&O (or futures and options) investing often includes trading with funds you acquire as loans, increasing your likeliness to suffer losses. This is why investing in commodities is usually more suited to more seasoned investors.

Residential and Commercial Property

You as an investor, can invest in real estate by buying a piece of land, building, or a house. When it comes to real estate investments, the risk level can vary. In fact, it depends on numerous factors like crime rates, state school ratings, economic phases, and the stability status of your local government.

Investors wishing to invest in real estate without the need to actually own or even handle real estate may opt for buying real estate investment trust (or REIT) shares. These are companies using real estate in order to produce revenue for stakeholders. They usually pay higher returns compared to other sorts of assets, such as stocks.

ETFs (Exchange-Traded Funds), Mutual Funds

ETFs (exchange-traded funds) and mutual funds buy bonds, stocks, and commodities, under a specific approach. Funds such as mutual funds and ETFs enable the investor to invest in numerous amounts (hundreds to thousands) of assets immediately when they buy their stocks. This variety makes ETFs and mutual funds less risky compared to personal investments.

While both ETFs and mutual funds are classifications of funds, they both work slightly differently. Mutual funds purchase and sell a wide spectrum of holdings and are normally managed actively. This means that a seasoned investor opts for what they invest in. In the case of mutual funds: they often attempt to do better than a reference index. This dynamic, practical management suggests that mutual funds are a lot more expensive to invest in compared to ETFs.

ETFs also come with hundreds, if not thousands, of personal securities. Instead of trying to compete with a specific index, ETFs, instead, attempt to emulate the performance of a certain reference index. This rather inert approach to investing means the investor’s profit may not really surpass average standard performance.

Since these are not managed actively, ETFs do not cost as much as mutual funds, and traditionally, only a small number of actively handled mutual funds have surpassed their reference indexes and long-term passive revenue.

Investment Trusts

Trusts are a separate kind of funds; Real Estate Investment Trusts (or REITs) are the prevalent in this group. REITs involve the investment of residential or commercial assets and offer recurring payments to their investors from the rental earnings they receive from these assets. REITs are traded on stock markets and offer their stockholders the benefit of immediate liquidity.

Options And Derivatives

An option is a commonly used derivative that offer the investor the right (not the obligation, however) to invest in or sell a security at a fixed rate within a particular period of time. Derivatives are economic instruments that infer their value from other instrument like indexes or stocks. Derivatives normally offer leverage. This makes them a high reward, yet high-risk schemes.

Investing Methods

Following are the most common investing methods and their comparisons:

Value Vs Growth

Growth investors opt for investing in high-growth corporations. Those normally come with increased valuation ratios like Price to Earnings (or P/E) compared to value corporations. Value corporations have noticeably lower Price to Earnings ratios and higher profit yields than growth corporations since they might be out of favour with shareholders, either briefly or for a longer time period.

Passive Vs Active Investing

Passive investing involves a passive technique, like buying index funds, keeping in mind the fact that it is complicated being able to compete with the market and beating it consistently. The objective of active investing, however, is to compete with the index via actively administering the asset portfolio. Although both approaches come with their own gains and drawbacks, in actuality, however, only a few asset managers successfully surpass their benchmarks regularly enough to warrant the higher charges of active management.

Why Do People Invest?

The flippant answer to this question would be to make money? But it’s important to point out that everybody has different needs and expectations. Plus, the way a person invests will depend on how risk-averse they are. To put this in even simpler terms some people invest to attempt to increase their monetary value significantly while others invest to make a steady amount of money over a period of time.

To best answer, this question would be why would you like to invest? Do you have spare money you are prepared to lose with the chance of becoming rich or do you want to plan for your retirement on the beaches? Later in this article, we will go into the several things you can do depending on how you might like to invest. But for now, following are the main reasons why people invest, in a bit more detail:

Higher Investment Returns

To increase your revenue, it is important that you store it in a place where it can be of use by earning a high return rate. The higher the return rate gets, the more money you earn after investing. Investment assets normally offer the possibility to gain much higher return rates compared to stockpiles. Thus, if you wish to earn greater returns on your funds, you may need to explore how to invest your money.

Investment money in an asset offers accommodation as you refrain yourself from using in in the present, gaining much higher utility in the long run.

Investing in stock can result in returns via two means: one possibly through returns and the other through interest.

Investing in bonds can result in benefits for the investor, either via coupons or regular payments offered during preplanned periods of time.

Solid Retirement Plans

By putting your retirement savings into an investment portfolio, e.g., bonds, stocks, businesses, mutual funds, etc., you will be able to enjoy the funds you earn from such investments later in life.

Although the government or corporations use to provide an outlined retirement plan for workers before, now employees have to depend on outlined predetermined plans.

A considerable number of the youth also opt for early retirement, and in order to do that, they have to invest a greater portion of their salaries to be able to achieve their goals.

Putting away a substantial proportion of income (around 70 per cent, even) at an early age can allow an individual to retire earlier in life as well, i.e., retiring in your forties instead of your sixties.

Tax Efficacy

Investment can also aid in saving on taxes as there are taxes where the taxes on your investments are non-existent.

The government has created certain kinds of accounts so that citizens can fund and contribute to their own retirement.

Inflation Beating

Investing is also important in terms of beating inflation. If someone does not invest their money and leaves it in their checking account, the funds will decrease in value, as inflation eats away at the value of their money.

In order to ensure oneself against a certain predicament, it would be better to begin investing in a combination of assets which ensure beating inflation.

The Opportunity To Meet Financial Goals

Investing happens to be one of the most crucial ways an individual can achieve their set financial goals. As life goes on, new financial necessities tend to surface. It usually begins with buying a home and even if you fund a house through loan you take, a substantial advance payment is always required. If you invest through a combination of assets, you may be able to gather the funds needed for the advanced payment. Other possible investments also involve buying a car or starting your own business.

Yet another crucial investment goal for you may be to easily fund the higher education of your children. Since college tuitions are so steep nowadays, it is advisable for parents to begin investing funds of college tuitions while their children are still young.

Besides these very obvious financial requirements, retirement is always an inevitable financial goal for people throughout their professional lives.

Starting And Running A Business

Investing is a crucial business creating a business and expanding it. A lot of investors opt for supporting businesspeople and contribute monetarily to the generation of new products and jobs. In fact, they appreciate the process of generating new businesses and structuring them into successful ones that can, in the long run, bring them substantial returns on their investments.

This works the same way for business ventures that need monetary backing. Entrepreneurs starting new ventures are often on the lookout for investors to help with that kind of backing. Some investors may enjoy the thrill of getting to invest in a new service or product, or even be a part of something that introduces them to an exciting new world.

Earning Extra Income

It is viable to make additional income by investing in substantial investments. The profits of your investments could possibly be used as an extra source of income for your daily living. You may also opt for reinvesting that same money to grow your fortune. Depending on what your appetite for risk is as an investor, investing can result in being more than emergency cash.

Easy Selling

The stock exchange allows traders to sell stock at any time. Analysts often use the word “liquid”, which means you are able to convert your shares or stock immediately into cash with minimal transaction charges. This is crucial if you suddenly need money. Since prices are subject to volatility, you are always at the risk of suffering losses.

Easy Buying

The stock market always makes buying company shares a straightforward process. You can either purchase stocks through a financial planner, broker, or even online. You can invest in stocks in a matter of minutes, granted you have an account set up. Some online brokers even provide you stocks to buy without any commission charges.

Drawbacks Of Investing

While investing can benefit you in numerous ways, there are still a few drawbacks to be careful of because investing, however easy it may sound, still requires a sharp mind as well as a bit knowledge about investing. Following are the possible drawbacks of investing:

The Losses Suffered

Investments are never risk free, there are always chances of investors losing their investments. Even government stock, which is seen as the safest kind of investment, also comes with its own risks. Governments are also known to default on their dues, in fact, there are many examples of such defaults in recent history.

The Possible Learning Curve

In order to invest, you need to have technical knowledge about not only finance, but various times of asset categories as well. Experience is also highly crucial in investing, because an investor who has witnessed numerous economic cycles can navigate economic situations a lot better than new investors.

Because many individuals have not been trained in finance, they might seek help from a professional advisor. Searching for the right investment consultant is a tedious task because of the possible cash of interest about how they get paid for the job. This is one of the main reasons why a lot of DIY investors steer clear of mutual funds.

Mentally Exhausting

Stock prices are always rising and falling each second, and as a result, investors often purchase high, and sell low out of apprehension. The best way to avoid this is to avoid constantly monitoring the price swings of stocks. It is still advisable to check the situation regularly, so you do not miss out.

Competition

Professional traders and investors often have a lot more knowledge and time for investing. They also have professional-grade financial modes, trading tools, and computers to make the most out of investing. This, again, may be stressful to an individual who has just started investing.

Investing Statistics

Statistics can be flawed as they do not give a true picture in terms of what someone might be hoping to achieve. They also might not factor in levels of experience. If you have signed up to a broker you might have seen warnings that 75% of investors lose money. This off the bat is enough for anyone to think that trading might not be for them but let's stop for a second and consider what this all means.

How many people do you think invest a small amount of money in a stock and get bored? A huge number of people do this and this all stems from a lack of understanding in investing. If you invest in a well-established stock the likelihood is that the price action you will see is not going to be terribly exciting. What it is likely to be though is stable, an often-overlooked quality by newbie traders.

Back to statistics. What would you think indicated a good return for an investor? For the purposes of this question, we are going to focus on the investors who are able to make a consistent profit every year with as little volatility as possible? This number will be somewhere between 1 and 12%. Maybe you are a little bit disappointed by this but if it were much higher you would be surprised how quickly a small amount of money will add up.

The world’s capital market has seen a considerable number of changes over the years. The latest developments point to the fact that investments have become crucial in order to ensure financial freedom as well as safety in the long term. Expert opinion suggests that people should at least invest a few bucks every month.

Below are a few investment statistics that represent the financial market of today:

The EU Retains The World’s Greatest DFI Stocks

According to what is stated in the World Factbook, the European Union holds DFI stock worth $8.41 trillion.

To put it simply, DFI stock considers the US Dollar value of all the investments that citizens of a particular make on the global market. Usually, companies make such investments and the DFI does not represent stock investments. The last evaluation was made at the end of December 2016.

By 2018, The US Amassed $5.64 Worth of Overseas Investments

The US comes third on CIA’s record after the Netherlands having a DFI (or direct foreign investments) of $5.8 trillion throughout the same period. As reported by investment statistics, other countries that rank high include Germany with $2.07 trillion, Hong Kong with 1.8 trillion, the United Kingdom with $1.63 trillion, Switzerland with $1.55 trillion, Japan with $1.54 trillion, Ireland with $1.49 trillion, and France with $1.45 trillion.

Excessive Trading Can Negatively Affect Returns

According to a study conducted by seasoned Terrance Odean and Brad Barber, the most active traders gained the lowest profits. From 1992 to 2006, 80 per cent of active traders have suffered losses with only 1 per cent considered foreseeably profitable.

Inflation Can Drastically Reduce Your Purchasing Power

Inflation has ultimately shown an average of 3 per cent on a yearly basis. This may not seem as severe, but this is enough to give $100K the buying power of merely $54K in twenty years, for example. Hence it is crucial that you consider the impact of inflation as you build your pension plan.

Stocks Have Surged By 1,100 Times Over The Past Seven Decades

Over the previous seventy years, the S&P 500 saw a 1,100-fold upsurge which is enough to change an investment of $1K into more than 1 million dollars. This massive gain occurred despite numerous double-figure market collapses and recessions. The important thing to note is that the stock exchange is subject to surges, not in a straight, consistent, line, however.

You Can Cut Your Tax Bracket In Half By Investing Long-Term

The capital stockpile tax bracket on brief investments (ones owned for a year or less) is the similar to your corporate income tax which happens to be 25 per cent for a majority, and 28 percent and above for high earners. On capital gains that are long term, a majority of us may experience a tax hit of only 15%.

A Majority Of Experts Recommend Investors To Hold 10 To 30 Stocks

The point to make here is that holding less than 10 stocks could mean a shortage of diversification and this could result in a drastic budgetary impart if stock value goes volatile during a decline. On the contrary, holding more than 30 stocks is also tricky as it involves constant administration, which may be a bit too much effort on your part as an investor. This also depends on how much you can afford to lose as well as the original amount of money invested in every stock.

Investment Goals By Age

The age you are getting into the markets is likely to have a huge effect on the way you want to invest. It should also be said that your personality will have a bigger effect on this as your decisions will be affected by how you feel by being in a negative balance, would you consider yourself a natural risk-taker, and several other factors in the background. Age, salary, and personality are three things that are most likely to shape your attitude.

Sometimes people are in the fortunate position that they have a significant amount of money that they can afford to lose. This might also influence the fashion in which a person is likely to invest.

If you are in your early 20’s you can invest to start saving for your retirement. This will involve attempting to return around about 4% a year over the course of decades. This would ultimately mean that all the money you have invested into this fund would have more than doubled by the time you take it out.

What Is The Investment Industry?

There is no doubt that the financial industry is one side of a country that is incredibly vast and has connections in every corner of the economy. From a single individual to a whole financial firm, the vastness of the industry makes it tedious to search for reputable sources of information. The real question is, whom to trust in such a large industry?

Stocks, securities, and bonds, are what bring buyers and sellers together via exchange centers. The stock market itself is a complex network made up of stockbrokers, counterparties, regulators with IT systems connecting everyone together.

Stock Exchanges

There are several stock exchanges centers in the United States of America, but the most reputable exchange centers made public include the New York Stock Exchange (NYSE), the National Association of Securities Dealer (NASDAQ), and of course the American Exchange (AMEX). These three are top-tier exchange centers and hold a prominent name in the market.

The Over the counter (OTC) market exists for buyers and sellers to meet via a dealer’s private network. Since OTC trading is not listed as a formal exchange, and therefore it is less standardized and is not often regulated.

Although exchange centers are private, with the recent globalization trend many centers will trade stocks and bonds across the border. Trading at an international scale is made possible through mergers and partnerships between companies.

Commodity Exchanges

Besides stocks and bonds, there are quite a few exchange centers that allow buyers and sellers to trade in commodities, such as derivatives, options, and so on. There are two prominent exchange centers for commodities in the United States, these are the Chicago Board of Trade (CBOT), and the Chicago Board Options Exchange (CBOE).

Banks, Dealers, Institutes, and Banks. These four act as the main cells of the overall industry. A broker acts on the behalf of investors, buying and selling assets as ordered by investors. Brokers are responsible for connecting buyers and sellers and arranging transactions between the two clients.

Retail Investors

Retail investors trade through brokers due to the design of the exchange system, which is generally based on a tier-list system. That is why retails investors must trade through a broker since they cannot directly access the exchange.

It is common to mistake dealers for brokers, and vice versa. However, dealers are individual business entities that buy and sell their assets on their own accounts. A rule of thumb is dealer trades businesses for their own accounts, brokers buy and sell assets on the behalf of their clients. Dealers usually buy and sell assets in bulk quantities at exchange centers and can often stabilize the prices in the process.

Often times a broker may be a dealer as well. Broker-dealers are the people that act as brokers when trading on the behalf of others and act as dealers when trading on their own account.

Institutional Investors

An institutional investor is a company or an organization that pools money for real estate and security purchases. These institutions include credit unions, pension funds, hedge funds, and insurance companies. Institutional investors act on the behalf of their investors, buying and selling assets in bulk quantities.

Banks are included in the institutional investor bandwagon. Banks participate in the financial market on the behalf of their customers in money market funds, and similar investment products. Banks may also trade in the market for their own benefit, a controversial act that became the subject of scrutiny during the Financial Crises in 2008.

Retail investors usually access the market through a broker, although they can still access it accordingly or against a broker’s advice. Retail investors can also turn towards local banks that offer investment products, or a stake in mutual funds. In either case, the bank will invest the money for the customer.

A good start for new investors is in Exchange Traded Funds (ETFs). ETFs are classed as a type of fund traded through stock exchanges similar to ordinary securities and alike. ETFs offer liquidity and choice. Since they are listed on exchanges, ETF investors should use brokers to buy shares in ETF.

Financial Regulation

The financial industry is maintained by regulatory agencies that act as guardians of the market and investors. The policies these agencies established can influence an investor’s decision. To prevent fraudulent business conducts, major agencies such as the Securities and Exchange Commission (SEC) are responsible for investigating an investor’s business activities. Other agencies such as the Financial Industry Regulatory Authority (FINRA) investigates the overall industry.

Commodity Trading Regulation

Investors trading with commodities are regulated by the Commodities Future Trading Commission. Banks and account holders are regulated by the Federal Deposit Insurance Corporation (FDIC).

Each of the agencies regulates all the financial institutes to a degree and usually serves other purposes as well. However, not all agencies are owned by the government. For instance, FINRA a private corporation that is funded by members, while FDIC is a government-owned corporation.

There is an absurd amount of information available on the internet, however, whether the sources are reputable or not, has been a growing concern. It is usually up to the individual's best judgment to trust the correct information after doing some research.

Certain websites including the SEC's own website and the UKs FSA provide reputable information. Plenty of financial sites provide simplified information of the same context such as Google Finance. Suppose a financial firm has posted its statements on the official site but does not appear on the SEC list, it could be a sign of fraudulent activity. Otherwise, it could be a private company and needs to be investigated further.

Reputable Financial Market Data

Many companies online provide reliable information; however, it comes at a cost. Thomas Reuter Corporation and Bloomberg are two reliable sources providing data, while companies such as Morningstar provides data analysis and research. The information provided is reputable, but the fees are can quite high.

Social media pages of some companies provide accurate analysis and statements. Official twitter pages of companies are the perfect place to get the latest information about the company.

Growth Of Online Trading

It wasn’t that long ago that the world of trading was seen as an exclusive club where images of wall street smacked of elitism, although that image still does exist it should be fastly diminishing as now anyone can trade from their laptop or phone. There are several platforms on which people can do this but before you make any decisions make sure you do all the relevant research and only invest money that you can afford.

eToro copy trading is a platform that has the potential to completely radicalize the way people invest. On this platform, you will have the option of copying a well-established trader. Their trading record will be available for all to read and then the user can decide how much they want to allocate to them. Every time a trader makes a trade you will have the same trade made in your portfolio.

If the trader allocated one percent of their funds to an asset, one percent of your funds will be allocated to your portfolio.

One of the great things about copy trading is that you don't have to constantly trade. In fact you could technically decide not to check your investments for years if you wanted to. You can also choose what type of trader you want to go for. There is one particular trader we have seen who has not had a losing month for 6 years. This is amazing work but as you might imagine the profit is not as eye-watering as you might be hoping for.

Your Investing Rights

Please know your rights before you make any financial decisions. The most important thing we advise you to is to make sure without a shadow of a doubt that the platform you are investing in is trusted and reputable and that your funds will remain safe. One thing that you should also take into consideration is what will happen to my money in the event the company I am investing in goes bust?

Certain providers of investments are however covered by the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS). That means if they go bust, you could get your money back.

If you use a cryptocurrency exchange you need to understand that you are responsible for your money as the potential for a scammer to come in and send all of your money to a different wallet address. Therefore this is something you need to be conscious of, so we personally advise that you use several exchange sites and have separate wallets for different altcoins before you invest large sums of money. In this event, if you are a victim of such a crime then you would only lose a fraction of your portfolio. If you keep everything safe though it is unlikely you will be a victim of such a crime.

So what rights do you have if your investment performs poorly? In such cases, not many since the FSC and the FOS is not designed to cover the poor performance of your investment. It can be confusing for some investors but bear in mind that any investment in a well-known platform ends up busting, you will be covered by the FSCS. However, if you invest in a platform as a shareholder, and the company busts, you will not be covered by the FSCS. Also, you cannot file a complaint with the FOS since there is no longer a company to complain about.

However, you can still make a FOS complaint if you had sold an investment, and it performed poorly. That is, assuming you were not aware of the risks involved.

Check Your Brokers Standing With Financial Regulators

To minimize the risks involved with investing, and ensuring your investment performs well, it is important to check the companys status on the Financial Services Register. Any firm under the FSA list will be regulated, and thus your investment will be safer from busting. Fraudsters and criminals usually make a convincing webpage of a firm with FCS and FSCS logos.

By checking a company’s reference number with the FSR, you can be sure the firm is legitimate. It is worth considering that oftentimes a firm regulated by the FCA may still sell unregulated investments. If you invest in those firms, you will not be covered by the FSCS unless you invested under the advice of an independent financial adviser.

What are unregulated investments? These include:

  1. Digital assets such as bitcoin, and cryptocurrencies
  2. Mini-Bonds
  3. Peer to peer investments
  4. Investments in luxurious materials like art, and wine
  5. Investments in unusual entities, like parking spaces, shipping containers, etc.

Unregulated investments are significantly risky. If you have doubts it is best to avoid investing and consult with the FCA warning list to be sure.

Reporting An Investment Firm

Often times a regulatory agency may reward an investor for reporting fraudulent activities of a firm. The Investor Protection Act of 2009 was established to enhance the authority of regulatory agencies such as the Securities and Exchange Commission (SEC). Under the act, the whistleblower that reported the fraudulent activities of the firm to the agencies would be rewarded and protected from harm.

The act was introduced to prevent financial crises in the past from repeating. The act aimed to affirm the legitimacy of firms, and their financial products, and any trading strategies. It also provided consultancy services.

Whistleblowers in particular are given priority under the act. Reporting fraud and violence led them to be rewarded and have their rights protected. So in short, a whistleblower has the authority to take legal action against any violation.

While regulatory agencies protect your rights as an investor, it is more important to be watchful for red flags in a company. In fact, before you start investing in a company, you as a consumer have the right to peer into the investment products and reconsider your choices.

A company that offers to sell you investment funds, pension and life insurance policies, and so on, must provide you with an investor information document. This document provides an overview of all the investment products and usually has details regarding terms and policies.

The document must be provided to an investor, and thoroughly read to make sure there are not any inconveniences afterwards. Keeping an additional copy is highly recommended.

The key facts document does not contain full terms and conditions, however. Instead, it is meant to provide investors with a brief overview of how the products work, the risks and benefits associated with investing, and what you are signing up for.

Using the information in the document, you can decide whether to cash in or back away. The document is especially useful when consulting with the FCA about the firm and confirming your rights to complain with the FOS. So always make sure you have a copy of the document.

There is a chance you might get caught up with the pros of investing in a company, and that is normal. However, it is advised to not make a decision when excited, instead take time off from the decision and give yourself a chance to reconsider. Analyzing the documents in a new light may help in making a calculated and logical decision.

The cool-off period usually lasts 14 days, during which you have time to reconsider your choices or follow through with the initial decision. During this time, you do not have to pay a penalty for canceling, however, certain products like insurance policies and funds require you to pay. You may also have to pay for costs incurred by the firm.

Lodging A Complaint Through The Financial Ombudsman Service

Before going ahead and lodging a complaint through the FOS if you are experiencing problems with a financial service, product, or guidance from a financial corporation, it is best to first complain to the firm you are having issues with. Your complaint must be resolved within an eight-week period. If you still do not receive a response within this time frame, or in other cases, your complaint has not been addressed, you can forward your case to the FOS. The FOS can obligate it for a financial institution to put things in order and offer you a compensation of £350K, or above (this amount rises annually with inflation). If you are dissatisfied with the verdict, it is also possible to bring a court trial against the financial corporation. This can be an expensive process, not to mention laborious as well; referring to the FOS, however, is free of cost and does not require any legal assistance.

Investment Summary

In simple terms, it is putting money into something in order to get a profitable return. There are basically four main types of investments, also known as 'asset classes'. These four are discussed below.

Apart from the above four, there are some other types of investments. A couple of these are discussed below.

Investors usually follow the saying, 'don't put all your eggs in one basket', so they invest in various assets. The collection of such assets is called, a 'portfolio'.

The best portfolios always spread the risk by investing money between various types of asset classes— both higher risk and lower risk. This is one of the most important investing guides to be aware of.

What is Return?

Return is simply the profit earned out of investments. However, it completely relies on where the money has been invested. Some of these are discussed below.

It should be noted here that fees charged by brokers may reduce the investment returns. If the fees are high, a good percentage of the profit could be eaten up by the service provider. Hence, in this 'Investing Guides' article, it is recommended to deal with brokerage houses that charge lower, or no fees/commissions.

What is Risk?

No one likes gambling with their savings, but it would be unwise to believe that there is absolutely no risk in investing. There are differing risks depending on the asset class. Savings accounts have the least risk; but the return is not as good, compared to other types of investments. Shares and stocks are highly risky products, but can simultaneously bring in a fortune if the market conditions are highly favorable.

According to our 'Investing Guides' tip mentioned above, one should not stick to only one type of investment. Money should be put into various financial products. It should be a mix of high risk and low risk to keep a good balance and earn a decent profit.

This is called diversifying. Better diversification means the chance of loss can be minimized, while the likelihood of profit increases. Usually, experts are able to mix and match their portfolios the best. So, sometimes the suggestions of experts are needed while diversifying or copying the portfolio of successful traders.

When to Start Investing?

One can start investing any time, but it depends on the availability of the required money. If one has plenty of money in a savings account, it is suggested to start with investing a part of the total savings. Wiping out savings completely is a bad idea. If there is not enough money left in the savings account to cover at least six months, it is not the right time to start investing.

Investing Guides Verdict

In this article, titled 'Investing Guides', we discussed some basic fundamentals of putting savings into investments. Beginners may find great help from it, but they are also warned not to jump-start immediately. Knowing the art of investing is important. A good knowledge of the financial market is equally required. Hence, those who are new to investing are advised to start with a demo account to gain experience and learn from failures.

A demo account is offered by most brokers and comes with virtual money. Trading through a demo account is like trading with real money and in real-time, but without losing one's own money. It offers good exposure to the market and helps in gaining ample understanding before opening a live account and starting to trade with real money.

If the savings goal of an individual is beyond a period of five years, it is suggested to think about investing the cash in order to earn good returns. This will help in defeating inflation and keeping up with rising prices.

We've collected thousands of datapoints and written a guide to help you find the best Investing Guides for you. We hope this guide helps you find a reputable broker that matches what you need. We list the what we think are the best Investment below.

Reputable Investing Guides Checklist

There are a number of important factors to consider when picking an online Investment trading brokerage.

Our team have listed brokers that match your criteria for you below. All brokerage data has been summarised into a comparison table. Scroll down.

Our brokerage comparison table below allows you to compare the below features for brokers offering Investment.

We compare these features to make it easier for you to make a more informed choice.

Top 15 Investment of 2021 compared

Here are the top Investment.

Compare Investment min deposits, regulation, headquarters, benefits, funding methods and fees side by side.

All brokers below are Investment. Learn more about what they offer below.

You can scroll left and right on the comparison table below to see more Investment that accept Investment clients

Broker eToro AvaTrade IC Markets XTB Pepperstone FP Markets XM Plus500 FXPrimus EasyMarkets SpreadEx
Rating
Regulation Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID), Australian Securities and Investments Commission (ASIC) Central Bank of Ireland, Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), South African Financial Sector Conduct Authority (FSCA), Financial Stability Board (FSB), Abu Dhabi Global Markets (ADGM), Financial Regulatory Services Authority (FRSA), British Virgin Islands Financial Services Commission (BVI) Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), Cyprus Securities and Exchange Commission (CySEC) Financial Conduct Authority (FCA), FCA number FRN 522157, Cyprus Securities and Exchange Commission (CySEC), CySEC Licence Number: 169/12, Comisión Nacional del Mercado de Valores, Komisja Nadzoru Finansowego, Belize International Financial Services Commission (IFSC) under license number IFSC/60/413/TS/19, Polish Securities and Exchange Commission (KPWiG) Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC), Federal Financial Supervisory Authority (BaFin), Dubai Financial Services Authority (DFSA), Capital Markets Authority of Kenya (CMA), Pepperstone Markets Limited is incorporated in The Bahamas (number 177174 B), Licensed by the Securities Commission of the Bahamas (SCB) number SIA-F217 Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) Plus500UK Ltd authorized & regulated by the FCA (#509909), Plus500CY Ltd authorized & regulated by CySEC (#250/14), Plus500AU Pty Ltd (ACN 153301681), ASIC in Australia AFSL #417727, FMA in New Zealand, FSP #486026 and Authorised Financial Services Provider in South Africa FSP #47546 Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID) Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) Financial Conduct Authority (FCA)
Min Deposit 200 250 200 No minimum deposit 200 100 5 100 100 100 1
Funding
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
  • Bank transfer
  • Credit Card
  • Paypal
Used By 20,000,000+ 200,000+ 180,000+ 250,000+ 89,000+ 10,000+ 3,500,000+ 15,500+ 10,000+ 142,500+ 10,000+
Benefits
  • Offers STP
  • Low min deposit
  • Offers Negative Balance Protection
  • Allows scalping
  • Allows hedging
  • Low min deposit
  • Allows scalping
  • Allows hedging
  • Low min deposit
  • Offers Negative Balance Protection
  • Allows scalping
  • Allows hedging
  • Offers STP
  • Low min deposit
  • Offers Negative Balance Protection
  • Allows scalping
  • Allows hedging
  • Offers STP
  • Low min deposit
  • Offers Negative Balance Protection
  • Allows scalping
  • Allows hedging
  • Offers STP
  • Low min deposit
  • Offers Negative Balance Protection
  • Allows scalping
  • Allows hedging
  • Low min deposit
  • Offers Negative Balance Protection
  • Low min deposit
  • Offers Negative Balance Protection
  • Allows scalping
  • Allows hedging
  • Offers STP
  • Low min deposit
  • Allows scalping
  • Allows hedging
  • Low min deposit
  • Guaranteed stop loss
  • Offers Negative Balance Protection
  • Allows scalping
  • Allows hedging
  • Low min deposit
  • Guaranteed stop loss
Accounts
  • Demo account
  • Standard account
  • Islamic account
  • Demo account
  • Micro account
  • Mini account
  • Standard account
  • Islamic account
  • Demo account
  • Mini account
  • Standard account
  • Zero spread account
  • Raw Spread account
  • Islamic account
  • Pro account
  • Demo account
  • Micro account
  • Mini account
  • Standard account
  • Islamic account
  • Demo account
  • Mini account
  • Standard account
  • ECN account
  • Islamic account
  • Demo account
  • Mini account
  • Standard account
  • Zero spread account
  • ECN account
  • Managed account
  • Islamic account
  • Demo account
  • Micro account
  • Standard account
  • Zero spread account
  • Islamic account
  • Demo account
  • Standard account
  • Islamic account
  • Demo account
  • Micro account
  • Mini account
  • Standard account
  • ECN account
  • Managed account
  • Islamic account
  • Demo account
  • Micro account
  • Mini account
  • Standard account
  • Islamic account
  • Demo account
  • Standard account
Spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
  • fixed spreads
  • variable spreads
Platforms Web Trader, Tablet & Mobile apps Web Trader, MT4, MT5, AvaTradeGo, AvaOptions, Mac, Mobile Apps, ZuluTrade, DupliTrade, MQL5 MT4, MT5, Mirror Trader, ZuluTrade, Web Trader, cTrader, Mac MT4, Mirror Trader, Web Trader, Tablet & Mobile apps MT4, MT5, Mac, ZuluTrade, Web Trader, cTrader, Tablet & Mobile apps MT4, MT5, IRESS, Mac, Web Trader, Tablet & Mobile apps MT4, MT5, Mac, Web Trader, Tablet & Mobile apps Web Trader, Tablet & Mobile apps MT4, Mac, Mirror Trader, Web Trader, Tablet & Mobile apps MT4, Web Trader, Tablet & Mobile apps Web Trader, Tablet & Mobile apps
Support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
  • Live chat
  • Phone support
  • Email support
Learn More Sign Up with
etoro
Sign Up with
avatrade
Sign Up with
icmarkets
Sign Up with
xtb
Sign Up with
pepperstone
Sign Up with
fpmarkets
Sign Up with
xm
Sign Up with
plus500
Sign Up with
fxprimus
Sign Up with
easymarkets
Sign Up with
spreadex
Risk Warning 67% of retail investor accounts lose money when trading CFDs with this provider. 72% of retail investor accounts lose money when trading CFDs with this provider Losses can exceed deposits 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money Losses can exceed deposits Your capital is at risk 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Losses can exceed deposits Your capital is at risk Losses can exceed deposits
Demo eToro
Demo
AvaTrade
Demo
IC Markets
Demo
XTB
Demo
Pepperstone
Demo
FP Markets
Demo
XM
Demo
Plus500
Demo
FXPrimus
Demo
easyMarkets
Demo
SpreadEx
Demo
Excluded Countries IR, KP, BE, CA, JP, SY, TR, IL, BY, AL, MD, MK, RS, GN, CD, SD, ZW, ET, GH, TZ, LY, UG, ZM, BW, RW, TN, SO, NA, TG, SL, LR, GM, DJ, CI, PK, BN, TW, WS, NP, SG, VI, TM, TJ, UZ, LK, TT, HT, MM, BT, MH, MV, KZ, GD, FJ, BB, BM, BS, AG, AI, AW, LB, SV, US, PY, HN, GT, PR, NI, VG, AN, BE, BR, KP, NZ, TR, US, CA, SG AF, GN, SL, BW, IR, SY, MM, IQ, TG, KH, LS, YE, CI , LR, ZW, CU, LY, TZ, CG, ML, BO, LR, NE, AO, GM, NG, AG, GH, KR, KG, GN, SN, NA US, IN, PK, BD, NG , ID, BE, AU BR, KR, IR, IQ, SY, JP, US US, JP, NZ US, CA, IL, KR, IR, MM, CU, SD, SY MY, BE, US, CA, CN, ID, PH, TG, NG, DO, MA, ZW, PR, TZ, TN, UG, BW, AO, AE AF, CI, CU, IQ, IR, LY, MM, KR, SD, PR, US, AU, SY, DZ, JP, EC. US US, TR

All Investment in more detail

You can compare Investment ratings, min deposits what the the broker offers, funding methods, platforms, spread types, customer support options, regulation and account types side by side.

We also have an indepth Top Investment for 2021 article further below. You can see it now by clicking here

We have listed top Investment below.

Investing Guides List

eToro
(4/5)
Min deposit : 200
eToro was established in 2007 and is used by over 20000000+ traders. 67% of retail investor accounts lose money when trading CFDs with this provider. eToro offers Stocks, Commodities, Forex, CFDs, Social Trading, Indices, Cryptocurrency, Index Based Funds, Exchange Traded Funds (ETF). Cryptocurrency availability with eToro is subject to regulation. Buying and selling real cryptocurrency assets may not be available in your country through eToro. Please check the latest information made available on their website.

Funding methods

Bank transfer Credit Card Paypal

Platforms

Web Trader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID), Australian Securities and Investments Commission (ASIC)
AvaTrade
(4/5)
Min deposit : 250
AvaTrade was established in 2006 and is used by over 200000+ traders. 72% of retail investor accounts lose money when trading CFDs with this provider AvaTrade offers Forex, CFDs, Spread Betting, Social Trading.

Funding methods

Bank transfer Credit Card Paypal

Platforms

Web Trader, MT4, MT5, AvaTradeGo, AvaOptions, Mac, Mobile Apps, ZuluTrade, DupliTrade, MQL5

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Central Bank of Ireland, Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), South African Financial Sector Conduct Authority (FSCA), Financial Stability Board (FSB), Abu Dhabi Global Markets (ADGM), Financial Regulatory Services Authority (FRSA), British Virgin Islands Financial Services Commission (BVI)
IC Markets
(4/5)
Min deposit : 200
IC Markets was established in 2007 and is used by over 180000+ traders. Losses can exceed deposits IC Markets offers Forex, CFDs, Spread Betting, Share dealing, Cryptocurrencies. Cryptocurrency availability with IC Markets is subject to regulation.

Funding methods

Bank transfer Credit Card Paypal

Platforms

MT4, MT5, Mirror Trader, ZuluTrade, Web Trader, cTrader, Mac

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), Cyprus Securities and Exchange Commission (CySEC)
XTB
(4/5)
Min deposit : 0
XTB was established in 2002 and is used by over 250000+ traders. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. XTB offers Forex, CFDs, Cryptocurrency. Cryptocurrency availability with XTB is subject to regulation.

Funding methods

Bank transfer Credit Card Paypal

Platforms

MT4, Mirror Trader, Web Trader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Financial Conduct Authority (FCA), FCA number FRN 522157, Cyprus Securities and Exchange Commission (CySEC), CySEC Licence Number: 169/12, Comisión Nacional del Mercado de Valores, Komisja Nadzoru Finansowego, Belize International Financial Services Commission (IFSC) under license number IFSC/60/413/TS/19, Polish Securities and Exchange Commission (KPWiG)
Pepperstone
(4/5)
Min deposit : 200
Pepperstone was established in 2010 and is used by over 89000+ traders. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money Pepperstone offers Forex, CFDs, Social Trading.

Funding methods

Bank transfer Credit Card Paypal

Platforms

MT4, MT5, Mac, ZuluTrade, Web Trader, cTrader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC), Federal Financial Supervisory Authority (BaFin), Dubai Financial Services Authority (DFSA), Capital Markets Authority of Kenya (CMA), Pepperstone Markets Limited is incorporated in The Bahamas (number 177174 B), Licensed by the Securities Commission of the Bahamas (SCB) number SIA-F217
FP Markets
(4/5)
Min deposit : 100
FP Markets was established in 2005 and is used by over 10000+ traders. Losses can exceed deposits FP Markets offers Forex, CFDs.

Funding methods

Bank transfer Credit Card Paypal

Platforms

MT4, MT5, IRESS, Mac, Web Trader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC)
XM
(4/5)
Min deposit : 5
XM was established in 2009 and is used by over 3500000+ traders. Your capital is at risk XM offers Forex, CFDs.

Funding methods

Bank transfer Credit Card Paypal

Platforms

MT4, MT5, Mac, Web Trader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC)
Plus500
(4/5)
Min deposit : 100
Plus500 was established in 2008 and is used by over 15500+ traders. 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Plus500 offers CFDs.


Plus500 offer a 100% Free and Unlimited Demo account No Deposit fees/Commissions No hidden fees Competitive fees Tight Spreads

Funding methods

Bank transfer Credit Card Paypal

Platforms

Web Trader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Plus500UK Ltd authorized & regulated by the FCA (#509909), Plus500CY Ltd authorized & regulated by CySEC (#250/14), Plus500AU Pty Ltd (ACN 153301681), ASIC in Australia AFSL #417727, FMA in New Zealand, FSP #486026 and Authorised Financial Services Provider in South Africa FSP #47546
FXPrimus
(4/5)
Min deposit : 100
FXPrimus was established in 2009 and is used by over 10000+ traders. Losses can exceed deposits FXPrimus offers Forex, Social Trading.

Funding methods

Bank transfer Credit Card Paypal

Platforms

MT4, Mac, Mirror Trader, Web Trader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID)
EasyMarkets
(4/5)
Min deposit : 100
easyMarkets was established in 2001 and is used by over 142500+ traders. Your capital is at risk easyMarkets offers CFD, Forex, Commodities, Indices, Shares, Crypto. Cryptocurrency availability with easyMarkets is subject to regulation.

Funding methods

Bank transfer Credit Card Paypal

Platforms

MT4, Web Trader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC)
SpreadEx
(4/5)
Min deposit : 1
SpreadEx was established in 1999 and is used by over 10000+ traders. Losses can exceed deposits SpreadEx offers Forex, CFDs, and spread betting.

Funding methods

Bank transfer Credit Card Paypal

Platforms

Web Trader, Tablet & Mobile apps

Customer support

Live chat Phone support Email support

Account Types

Micro account Standard account Islamic account VIP account
Regulated by Financial Conduct Authority (FCA)