Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. 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 financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Contact us
No results found

View more search results

1 2 3 4 5 6 7 8 9 10

Using trading and investment products

Lesson 6 of 6

Is combining trading and investing right for me?

Because of the risks involved, a strategy that combines trading and investing is not for everyone. It’s important to have a strong financial foundation before adding leveraged products to your portfolio. You should also make sure that you have the financial stability to withstand the increased risk of loss when you add derivative products to your portfolio. In order to determine this, you could consider the following:

  • If I lost my income, I’d be able to pay my living expenses for at least three months
  • If I got into an accident or something happened to my belongings, I have the right short-term and long-term insurance to deal with the financial impact
  • I have long-term savings specifically set aside for my retirement
  • I’ve taken advantage of all the tax-free or tax-efficient investment allocations available to me
  • I have an appropriate long-term investment strategy suited to my financial goals and needs

Homework

Your success in using both trading and investment products will depend on how well you understand the correlation between the shares you own in your long-term portfolio and those you prefer to trade instead.

Play around with this tool to see how different asset classes correlate to one another. If you ran this experiment with your favourite share and currency pair, do you understand how the one would affect the other?

Lesson summary

  • Derivatives are complex products, so it’s important to have the right knowledge before trading them
  • Only add derivatives to your portfolio if you can handle potentially losing large amounts of money
Lesson complete
PreviousThe risks of a combined approach Lesson 5 of 6 NextQuiz

Contact us Privacy IG Community Cookies Terms and agreements

IG Group Careers

CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand the risks and take care to manage your exposure.

Trading CFDs may not be suitable for everyone, so please ensure that you fully understand the risks involved. IG does not issue advice, recommendations or opinion in relation to acquiring, holding or disposing of a CFD. IG is not a financial advisor and all services are provided on an execution only basis.

IG is a trading name of IG Limited a company registered at 2702 & 2703 Level 27, Tower 2, Al Fattan Currency House, DIFC, Dubai, United Arab Emirates. IG is authorised and regulated by the Dubai Financial Services Authority under Firm’s reference No. (F001780).

The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UAE and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

@2003 - 2023