Contracts for Difference – a dream or a nightmare?

Newspapers and magazines are full of advertisements for seminars on systems and products to help you get rich fast. The ads generally are full of testimonials from people who allegedly made a killing in months, not years – and it was soooo easy. Contracts for Difference (CFDs) have been one of the recent fashionable tools that has been promoted in such seminars.

I have always considered such systems to be akin to gambling for the average investor, and only suitable to the most sophisticated investor with deep pockets. Well the front page of yesterday’s Weekend Australian newspaper covered a story that reinforced that even the Australian regulator, ASIC considers them to be like gambling.

If you ever find yourself tempted by such glamorous advertisements in the newspaper then read the article to help you to further inform your investment decisions.