5 Essential Things You Need To Consider Before Opening a CFD Trading Account

If you are thinking of trading in the financial market, the first thing you might want to do is open a trading account. With a plethora of platform providers in Singapore, choosing a platform as a preferred broker might be more beneficial to you than you realize.

Since most providers offer very similar services, they may appear homogenous from the very start. However, if you take a closer look at the various services they offer, you will begin to notice all the differentiating factors. Here are some of the essential things you need to consider before opening a cfd trading account in Singapore.

Company’s Reputation

All thanks to the internet, personal finance has become truly globalized. A few years ago, retail investors used to rely on making phone calls to their trading representatives for the purpose of buying or selling their investments. However, in today’s world all one needs is a good internet connection to make use of the platforms being offered by providers in Singapore and the rest of the world.

One major disadvantage to this is that there are plenty of small and obscure providers out there offering brokerage services. A number of such firms offer new clients extremely low transaction costs in order to lure them to their platforms.

If you are looking to open a cfd trading account in Singapore, it is advisable that you go with a reputable and well-established trading firm. This is because CFD trading requires a specific type of skillset.

Ease of Opening a Trading Account

Human beings have the tendency of always looking for the most convenient option. Most people, if not all tend to appreciate a low barrier of entry. When you are able to easily open an account online, it saves you the time you would have taken to physically go to the office to sign up.

Similarly, if you are not required to put up a minimum trading amount to open the account, it will give you a chance to first test drive the platform before making any long term commitments.

Mobile Support

In today’s world, it is crucially important to be able to use your tablets or mobile device to conduct business and check on your trades. This is because people spend more times on their phones and they constantly have their mobile devices with them as compared to desktops and laptops.

Before you go opening a cfd trading account, ensure that the provider has an application that permits you to trade via tablet or mobile devices. This would really come in handy in the long run.

Educational Support

This is perhaps one of the most significant factors to consider when getting a CFD trading account.  However, educational support is frequently ignored by both traders and platforms alike. If you want to succeed in financial trading, you need to have full knowledge and understanding of what you are doing. Unlike gambling, CFD trading in Singapore requires a lot of experience, skills and knowledge.

A good company should have industry experts who assist you in trading strategy and other skillsets. Some of the topics covered should include technical analysis, forex trading and algorithm trading among others.

The Platform Provided

Some of the key considerations when choosing a platform should be availability of tools and user experience. These should comprise of charting indicators, as well as customizable features. Other things your trading platform should have include automated trading and stop-loss features among others.

When choosing a financial trading account, ensure that you get one that best suits your needs. There is no right answer when it comes to choosing the best cfd trading account, it all depends with what you intend to do. Whether you intend on making a periodical investment or making more frequent trades in multiple asset classes, the best choice for a trading account really depends on your intentions.

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Bonus is in! Time to Diversify Your Investments with Peer-to-Peer Lending

With most companies’ financial year ending in December, some of you may have received your bonus in March and are wondering what to do with it. There is no written rule on how you should be utilizing your bonus. Some choose to repay their outstanding debts, while others prefer to splurge on luxury items as a way of rewarding themselves for a job well done in the past year. Building wealth can be a part of your strategy (see what experts say at CNBC and Forbes), and what better time to do it than when you have fresh funds in your bank account?

Wealth building comes in many forms, from saving to investing, be it actively or passively, amongst other strategies. Today, we introduce you to an alternative investment – Peer-to-Peer (P2P) Lending.

Although new to many, P2P lending has changed the financial landscape in Singapore over the past three years. P2P platforms like Funding Societies offer SMEs additional avenues for business financing and give investors more opportunities to diversify their portfolios. In other words, as you see your wealth grow progressively, you’re also helping local SMEs grow their businesses.

Here are 4 reasons to consider putting part of your bonus into P2P lending:

1. It caters to all salary and bonus ranges

P2P lending is accommodating in terms of one’s starting investment capital. You don’t need a huge fortune to begin investing, and you can invest more depending on your risk appetite. For instance, Funding Societies allows you to make an investment from as low as $50. Not to mention, you only need to put in a $1,000 deposit (can be withdrawn at no cost) before you are able to access investment opportunities. Accredited and institutional investors with higher capital and risk tolerance may also put in tens of thousands per investment.

2. Shorter tenures means that you get to see your returns quickly

If you are looking for short-to-mid term investments, P2P lending is a feasible option for you. Many traditional investment products require lengthy lock-in period. Generally, that is not the case with P2P lending as the loan tenures are usually shorter. The tenure for Business Term Loans typically ranges from 1 – 12 months and from 30 – 90 days for Invoice Financing. What’s more, you receive monthly repayments from your investments in Business Term Loans (one-time repayment for Invoice Financing), which you may choose to re-invest in new loans, creating a compounding effect.

3. Potentially high returns: Up to 14% per annum

Yes, you read it right. P2P lending has become a part of many investors’ wealth building strategy possibly due to its attractive potential returns. Interest rates offered by Funding Societies typically range from 8% to 14% p.a.

While the key risk with investing in P2P lending is the non-performing loans, Funding Societies manages its default rate at less than 1.5% (as of April 2018), comparable to those of major banks. This is done through extensive credit assessment of the SMEs’ loan applications to give you quality opportunities to make your investments.

4. It is super easy to participate

Investing can often be time-consuming due to the multiple tools and monitoring required. However, P2P lending is relatively simple to participate in:

  1. Just look out for upcoming deals
  2. Read the respective fact sheets
  3. Decide on an amount to invest in.

Funding Societies further simplifies this process with its Auto-Invest function, which helps investors pre-select investments based on their pre-set criteria. Investors will be notified of the pre-selection and can decide to opt-out or go ahead with the investment. This not only makes investment hassle-free for investors, it also helps them to diversify their P2P investment portfolio by participating in multiple loans.

Start your P2P investment journey today with Funding Societies
Now that you have a clearer picture of P2P lending, consider allocating a portion of your bonus into this form of alternative investment and start earning up to 14% returns. Funding Societies is here to help you begin your P2P investment journey.

Founded in 2015, Funding Societies is the leading P2P financing platform with a Capital Markets Services license issued by the Monetary Association of Singapore. With operations in Singapore, Indonesia and Malaysia, Funding Societies has onboarded more than 45,000 investors in a span of three short years. Now, it’s your turn to get hands on investing in P2P lending.

Sign up with Funding Societies now!

Disclaimers

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

 

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4 Ways to maximize returns in crowdfunding

Peer-to-Peer(P2P) Lending, or debt crowdfunding, has grown tremendously since the concept originated in 2005 with Zopa in UK. In 2016 alone, P2P lending has generated more than $300 billion worth of investment opportunities worldwide. The concept helps the underserved or underbanked individuals and businesses access alternate sources of funding from investors who lend and earn passive income in the form of interest.

Southeast Asia is an emerging P2P lending market with a huge financial gap faced by SMEs. In the last 3 years, P2P lending has financed thousands of small businesses to support their growth, while offering investors an alternative investment opportunity. In Southeast Asia, one of the leading platforms, Funding Societies has funded more than S$120 million across Singapore, Indonesia and Malaysia. At the same time, they have given more than 45,000 investors access to this alternate investment class with net annualised returns of up to 14% in short tenor loans.

This article aims to highlight 4 important considerations to maximize your returns in P2P lending with examples of initiatives taken by Funding Societies:

  1. Choose your platform wisely

When investing, you want to choose a platform with decent track record and achievements. These are things to look out for in a good platform:

a. The platform has good risk management practices

Review the platform’s risk management – including filtering out bad quality loans, pricing returns as per the risk, and managing non-repayment and defaults. While most platforms do not publish their proprietary methodologies, their processes should be robust enough to identify potentially bad loans. A good indicator is the platform’s default rates. Funding Societies has a default rate of 1.3% (as of 7 March 2018), one of the lowest in the region.

To illustrate, here is an example of the impact of a low default rate:

Assuming gross annual yield of 12%, platform fee of 2% and default rate of 3% (on the higher side) one can make 7% in returns.

This of course is not assured but depends on many factors including platform’s risk management as mentioned above.

In the inevitable event of a late payment or default, it is essential for the platform to have a process to manage collections or exercise legal action. You should enquire the platform on its processes to have a better understanding and clearer expectations.

b. Skin in the game

Find out if the platform has YOUR interests aligned with theirs, and what’s in it for them to ensure that investors’ money is handled properly and the investment opportunities/loans are of good quality.

Firstly, the platform should know how to handle your money. Funding Societies is the first P2P financing platform in Singapore to engage an independent escrow agent to handle investors’ funds, keeping its operating funds separate from investors’ funds. This gives investors peace of mind knowing that their money is safeguarded by the escrow agent and will not be utilized for anything besides their investments.

Secondly, is the platform as invested as you are? The management at Funding Societies has a ‘skin in the game’ by investing in every single loan, and will do their best to maximize the returns and manage any negative impacts.

c. It cares about YOUR Experience!

Debatable – but a good platform should be all-encompassing in its experience, right? This should start from the platform, mobile app (convenient for you), and customer experience. More importantly, it should be responsive and helpful when you need to speak to someone.

  1. Understand macroeconomic conditions

Knowing the pulse of the economy will help you when you select the loans to invest in. This includes updates for each sector and government initiatives to boost SMEs and specific sectors.

Coupled with the factsheets provided by P2P lending platforms that state the company’s operational and financial health, you will gain a wider perspective of the economy and SMEs you are funding.

  1. Diversify your investments within the platform

As the saying goes, “Don’t put all your eggs in one basket”, the same goes for investing in P2P lending. Diversifying across many loans has its advantages specifically in spreading the risk across many loans and helping to minimise the impact of non-performing loans.

Funding Societies endeavours to provide ample opportunities to diversify your investments:

  • I. Participate in multiple loans with small amount (at times as low as $50)
  • II. Consider spreading the weightage of your investments in terms of loan amounts
  • III. You have the option to choose the industries to invest in.
  • IV. Funding Societies currently provides Business Term Loans and Invoice Financing for investment. You can consider both products when investing.

Using the Auto-Invest feature simplifies your road to diversification. All you have to do is set your criteria based on product, industry, tenor, rate of returns and industry. When an investment opportunity matches your criteria, you will be allocated the investment based on the auto allocation algorithm.

  1. Re-invest for compounding effect

When investing in P2P lending, repayments are made on a monthly basis (30,60,90 days in case of invoice financing), and you can decide, based on your risk appetite, whether to reinvest the repaid funds and thereby compound the returns.

Southeast Asia’s leading crowdfunding platform, Funding Societies, currently operates in Singapore, Indonesia and Malaysia. With more than 45,000 investors and being the only P2P lending platform to win the MAS FinTech Award (SME category, 2016), Funding Societies has also attained global recognition, being recognised amongst the Top 250 FinTech companies globally by CB Insights and winning the Best in Customer Experience for Alternative Financial Services by Retail Banker International.

Want to start investing in P2P lending? Sign up with Funding Societies today!

Disclaimers:

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

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Consequence of breaking your trading rules

We know you have been a naughty boy and you want to break your trading routine. The hardest thing of our lives is the best thing that can happen to us and we always want to break it. You can remember how hard it was for your parents to send you to the school. You will have all the sicknesses of the world and still, your daunting mother sent you off to school. Trading in Forex can be boring sometime and you will need a change. Many people try to make that change by not following their routine and the result is not sweet. If you are wondering in your mind and want to know what will happen when you do not follow the routine you have made for your trade, this article will tell you what will happen to your routine.

Discipline is the key to success

In any profession, you need to show a great deal of patience to become successful. When it comes to Forex trading there is no other alternative to discipline. The majority of the senior traders in Singapore are extremely discipline and for this reason, they are able to make a consistent profit. Unlike them, the novice traders are always breaking their rules and losing money. If you look at the success rate among the traders in Singapore you will be surprised to know that most of them are doing relatively well in the investment business. This is only because they always follow the key rule investment. They are never taking any excessive risk neither they are dealing with the market with emotions.

Emotions can easily ruin your trading career and you can do nothing about it. You need to learn to control your emotion by demo trading account for at least six months. If you can successfully demo trade the market, it’s time for you to start trading with your real money. But always remember, discipline is the key to success in Forex trading. Read books about trading psychology since it will greatly help you to become a better trader.

You will get unorganized

The first thing that you will see in your career that you will get unorganized. A routine does not improve a trader but it helps to keep organized. If you know what you are going to do when you have finished brushing your tooth, it will be much easier for you to keep track on your daily works. If you break your routine and do what you want, you may not do something important. When you will break your routine, you will get unorganized and you will make losses. You will analyze the market sometime and sometime you will trade with your mind and you cannot expect that you will make a profit with this trading.

Profit will be harder to make

When you are unorganized in your trades, the profit will not come to you. You have to trade the market with the same routine every day and when you do not do that, you will be trading on a hinge. Following your routine is the right thing to do in Forex and when you break it, you do not make the profit. Traders are always saying to develop your routine and following it every day. This is why it is important for you never to break your routine.

Your career will not improve

Every trader wants to improve their career and it is not possible if you are trading without routine. Always keep a routine and follow it whatever happens. You may not make profit always but you will build consistency in your trading. The successful trader never breaks their trading routine and this is why they are consistent in their career. It is not possible to advance in your career if your routine is not followed. Never break your routine and trade the market with it and you will be successful.

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Your 2018 Investment Resolution – Earn up to 14% p.a. in Returns

It’s the start of 2018 and you are perhaps setting up your investment goals for this year. Why not consider adding peer-to-peer lending into the mix? Also commonly known as debt crowdfunding, P2P lending has been around since 2007 in UK, and catching on in the region. Founded in Singapore, Funding Societies is currently the leading platform in Southeast Asia.

Here’re 5 reasons you should review peer-to-peer lending as part of your investment strategy:

  1. It’s not difficult to understand

Imagine a company needs to take a business loan for expansion, new projects  or seasonal stocking up. Platforms like Funding Societies act as a marketplace to crowdfund such loans, which may potentially yield attractive returns for investors like you.  The company pays its loan principal + interest repayment on a monthly basis and investors receive their initial capital (principal) plus returns on investment (interest).

Another product is invoice financing – Company A has sold its products or services (as a supplier) to Company B (buyer), and is waiting for Company B to pay. The waiting time depends on the invoice payment terms – usually 30, 45, 60 or 90 days. Company A can have an early access to the money by pledging the invoice on a P2P lending platform. Investors receive payments (including invested capital plus interest) on the due date when the invoice is paid.

  1. Investment starts from just $100

As loans are crowdfunded, a $200,000 can be filled by multiple investors starting from as low as $100. As a new investor, this is a good way for you to try peer-to-peer lending as a form of investment.

To many investors on Funding Societies’ platform, they take advantage of this minimal amount to diversify their investments extensively within the platform.

  1. See results in the short term

Business term loans on Funding Societies’ platform typically run for as short as 3 months and up to 12 months. Given that you receive monthly repayments as an investor, this product has a lock-in period as short as the loan tenure.

  1. Potential high returns & rigorous credit assessment

With returns as high as 14% per annum, P2P lending is a serious contender in one’s investment portfolio. Each loan coming to Funding Societies goes through rigorous in-house credit assessment before approving it to be crowdfunded on its platform.

  1. You have full control and still get support from the platform

As an investor, you have full autonomy to choose which loans to invest, depending on your risk appetite.

That said, there is still a Customer Experience team behind Funding Societies’ investor platform that you can reach out to. Miyu, the chatbot, is available 24X7 and steps in to help with round-the-clock queries. Many investors are also shaping some features through active feedback – talk about getting personal!

Start your investment journey with Funding Societies here.

Still have questions?

Funding Societies is organizing an investors’ event on 24 January 2018 from 6.30pm at The Working Capitol (1 Keong Saik Road). Attend the event as the team shares more about P2P lending and the investor platform!

Details and registration at: event.fundingsocieties.com/investor-24jan2018

Disclaimers

This article is contributed by Funding Societies.

It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.

Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.

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