CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider 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. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.

As the covid-19 pandemic has reminded us, absolutely anything can happen in life. All the predictions of the world can’t always see what’s around the corner which is why discussing trading and risk is important. Lots of people are investing or trading, either to make a little extra money in general or are wondering about getting on the bandwagon because they have a little extra time now. But with most industries having more questions than answers, and frequent news concerning the stock market, should you invest in a crisis? How can you meaningfully invest in a crisis?

Why and When Does the Market Change?

Even before Covid-19 truly affected the nation, there was talk of the markets reacting. Rumours can cause skittish investors and traders to pull out and panic affects the market greatly, leading to crashes which we see reported in the media. Historic market panics demonstrate that uncertainty and change tends to happen early on but quickly level out, often before the panic really hits the general public.

Profitable Companies do Better

Some businesses have an easier time making profits than others, who have an easier time burning through cash. Companies who rely on investors generally, rather than their own profits, will likely suffer the most from this time and if skittish investors pull out, it could be detrimental to everyone. That being said, indebted companies, though riskier, also have more potential reward.

What to Look For

There are two general options when investing in a crisis. You could either hunt for companies with big share price falls in the last few weeks who are generally financially strong and profitable; able to survive short-term shocks and provide reward. Alternatively, you could invest in the businesses who really need it as, if it catches on and the economy recovers quickly, there’s potential for good gains – but this is undeniably the risker option.

Acknowledging Risk

Whilst some brokers encourage everyone to try their hand at trading and investing, CFI are clear about risk with all their clients and encourage careful and conservative trading, as there is no getting away from the fact of risk. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs.  You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

It’s important to remember that nobody can predict the length or the outcome of this pandemic, but we’re all in the same boat and it could be a good opportunity to invest in quality businesses who you previously couldn’t afford. Investing in a crisis is a rare opportunity. Staying informed and level-headed will be your greatest asset.

Richard Wynn , 20th April 2020

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CFI Financial Group is an award winning global financial markets provider with regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads and zero commissions, professional services, dedicated support and powerful tools.

With over 22 years of group experience, and recently awarded “Best Online Financial Trading Services, Middle East” for 2020 by Capital Finance International, Credit Financier Invest brings their award-winning CFD platform to London.

CFI Financial Group also has regulated subsidiaries in
Larnaca • Beirut • Amman • Dubai • Port Luis

Credit Financier Invest Limited
16 Berkeley Street
London
W1J 8DZ
+44(0)20-3907-4131
+44(0)20-3907-4132
uk@cfifinancial.com

CFI UK is authorised and regulated by the Financial Conduct Authority (FCA) in the United Kingdom, 828955. Company Registration Number, 11634673

Important Disclaimer:
We would like to remind that while we endeavour to provide best possible services, CFI provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest Limited – CFI UK provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.