FTSE Growth

[garagemc]

I am new to spreadbetting but correct me if I am wrong.

I have read that on average the ftse has grown 9% a year for the last 15 years.

So wouldn't I make a killing if were to place a spread bet up, that rolls over everyday,

At the moment 9% is equivilant to roughly 550 ftse100 points. Even at £2 a point that is significant amount of money.

Is my theory flawed? There is a potentially a lot of money to be won by doing long terms spreads on stable indices.

Please advise.

 

[Mornington Crescent]

Seems your hindsight is 100%

How good is your foresight ?

 

[garagemc]

sorry?

 

[Pippppin]

the main flaw in your argument is that the 9% a year growth (if that is true) has not been linear ie. 9% this year, 9% next year etc. Markets do not move in nice straight lines. You would have to ride out considerable periods of negative growth, and of course there is no guarantee that the markets will grow at 9% over the coming years

However to dissect your theory properly would require time to gather the facts, but I am sure it is riddled with flaws

 

[Hoggums]

I am new to spreadbetting but correct me if I am wrong.

I have read that on average the ftse has grown 9% a year for the last 15 years.

So wouldn't I make a killing if were to place a spread bet up, that rolls over everyday,

At the moment 9% is equivilant to roughly 550 ftse100 points. Even at £2 a point that is significant amount of money.

Is my theory flawed? There is a potentially a lot of money to be won by doing long terms spreads on stable indices.

Please advise.

NO - you probably wouldn't make much money on the rolling daily because you'll get charged about 1.5 pips overnight in interest for every day of the week - That's 500 or so pips for the year. You'd probably be OK with futures as the interest amounts to approx 20pips per month, provided you can find an SB that does a yearly future (IG does.)

Of course if you have a year like 2003 then it's a lot of money to give away and your system would still be showing a loss since 2000.

 

[garagemc]

whats a pip?

 

[Snownation]

A point in the spread.

If the spread is 6210-6212, then that's a spread of 2 pips.