Long Term Portfolio Creation using a Spreadbet Firm

[clbfjc]

Hi,

Interested in peoples opinons or if anyone has created a fund via a spreadbet account. If you have a small amount of funds to invest and would like to Invest for the longer term, would you not be better creating a Portfolio within a spreadbet account rather than investing in the actual underlying shares in an ISA account. This would provide you with a way to gear and create a diversfied portfolio as the margin requirements would allow you to invest in a variety of stocks. You will also have the advantage of the investment being Tax free, just like an ISA, and although not receiving dividends directly, you can keep the spare cash that is not needed due to margining in a high interest account or purchase a short term bond and collect the coupon. I realise the bets expire, but they can be rolled if required. depending on your thoughts, strategys etc.

 

[anley]

Yes, it can easily be done and I'm surprised that many more people don't look at spread bets this way. Suppose, it's the way of the world these days when everyone is so short term.

I once held a long Gold position for around 18 months using spread bets,

Just use the quarterly bets and make sure you get the broker to roll them over for you as it's cheaper this way than if you do it yourself.

Good luck.

 

[clbfjc]

In your opinion would trading in this way be more benefical than trading in an ISA wrapper, with all the dealing charges that go with this.

 

[Trading2k]

Depending what you have selected roll overs can create their own problems. I would only use spread betting for short term trades up to 3 months. This is a leveraged product and I know many instances where losses have gone into the hundreds of thousands. In a traditional fund unless the company goes bust you can keep the shares through good and bad. In spread betting you will get a nasty margin call if things go bad.