Why are CFDs so risky for new traders in Singapore?

Contracts for Difference (CFDs) are a popular investment tool in Singapore, but they can be very risky for new traders. This article will explore the risks involved in CFD trading and why it’s essential to do your research before investing.

What are CFDs?

They are derivative products that allow investors to trade on the price movements of various assets, such as stocks, indices and currencies. They offer a high degree of liquidity and flexibility and can be used to speculate on markets’ movements or hedge against risk. Why are CFDs risky?

CFDs are a high-risk investment and can be especially risky for inexperienced traders. Here are some of the risks involved in CFD trading:

CFDs are a leveraged product.

It means that traders can control a large contract size with a relatively small amount of money. This leverage can work both ways, though, magnifying profits as well as losses.

Lower margins

The margin required to trade CFDs is usually much lower than traditional investments such as stocks and shares. It makes it easier for traders to enter into trades without committing a lot of capital upfront. However, it also means that losses can be incurred more quickly.

Price

The prices of CFDs are based on underlying assets such as stocks, commodities or currencies. These assets can be very volatile, meaning that the prices of CFDs can rush up and down. It makes it difficult for traders to predict where the prices will go, resulting in losses if they are not careful.

No physical delivery

CFDs are a derivative product, which means no physical delivery of the underlying asset. It can be a disadvantage if the trader wants to take delivery of the asset, for example, if they are trading gold CFDs and want to take delivery of gold bullion.

Counterparty risk

CFDs are traded on margin, which means that the trader only has to put up a small amount of money to open a position. When the market moves against them, they may be required to post additional funds to keep their positions open. If they cannot do this, the broker may close their positions and lose their investment.

Limited order types

CFD brokers usually offer a limited number of order types, making it difficult for traders to execute their trades in the way they want. It can lead to frustration and poor trading decisions.

No protection against losses

Unlike traditional investments, there is no protection against losses when trading CFDs. It means that if the trader loses money, they lose all of it. There is no option to claim back any losses from the broker.

High fees

CFD brokers usually charge high fees for trading CFDs. It can eat into profits and be a disadvantage for traders who are not making a lot of money.

Liquid markets

CFDs are traded on margin, which means that the trader only has to put up a small amount of money to open a position. When the market moves against them, they may be required to post additional funds to keep their positions open. If they cannot do this, the broker may close their positions and lose their investment.

No regulation

CFDs are not regulated in Singapore, meaning there is no guarantee that the broker will honour their trades or that the trader will get their money back if the broker goes bankrupt. It can be a considerable risk for traders unfamiliar with how CFDs work.

No Dividends

CFDs do not entitle the trader to any dividends from the underlying asset. It can be a disadvantage for investors looking for income from their investments.

Gamification

Many CFD brokers offer trading platforms that are designed to look like games. It can make trading feel more like gambling than investing, leading to poor trading decisions.

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Earnity’s Domenic Carosa and Dan Schatt on Overcoming the Hurdles of the Mass Adoption of Cryptocurrency

Before 2021 came to a close, decentralized finance (DeFi) firm Earnity had raised more than $20 million with the intent of developing a marketplace for crypto users to earn, collect, learn about, and gift tokens and portfolios of digital assets. The company hopes to make cryptocurrency available and accessible to a broader audience.

Earnity, led by co-founders Domenic Carosa and Dan Schatt, firmly believes that more people should reap the benefits of cryptocurrency. However, the world is still far from the wide-scale adoption of cryptocurrency that purists, enthusiasts, and early adopters had hoped for.

Earnity’s Domenic Carosa See More Room For Growth for Crypto

It is imperative to keep in mind, though, that the world is still in the early cryptocurrency days. Bitcoin may have been in use starting in 2009, but blockchain as a technology is still relatively young. The market capitalization for the popular cryptocurrency is more than $200 billion. And many others have seen massive valuations over the past years. Still, data suggests that crypto has much more room for growth.

Another roadblock to the mass adoption of cryptocurrency is the lack of education on how it works. Cryptocurrency and blockchain seem like abstract concepts that many people have found difficult to understand. The fear of not fully grasping how cryptocurrency functions have deterred countless users from entering the space.

Ease of use has also hindered the mainstream use of cryptocurrency. After all, not everyone will want to memorize or write down a 64-character seed phrase to access and transact with their funds. Until users can buy, sell, or hold without learning cryptography, the global adoption of cryptocurrency will remain a pipe dream.

Earnity’s Domenic Carosa and Dan Schatt seek to challenge these hurdles by creating a platform that makes transacting and earning crypto and DeFi products and protocols user-friendly yet secure. The company adheres to the notion that DeFi should be about access and not about putting up more barriers.

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Why Crypto is The Future of Finance Using Earnity from Dan Schatt

Cryptocurrency is a developing ecosystem that is slowly infiltrating the world’s traditional financial systems. According to statistics, the number of crypto users increased by 66 million between 2018 and 2020. Moreover, both private and public sectors are warming to the idea of using cryptocurrencies in their financial transactions, such as making payments, storing value, and investing. Finance legends Domenic Carosa and Dan Schatt have created Earnity to offer people a user-friendly way to transition.

The Dawning of Decentralized Finance

Many people believe that decentralized finance, or DeFi, will soon replace traditional financial processes by providing transparency and better transactional security.

DeFi is rapidly gaining traction in investing, trading, borrowing, and lending, which will spark a revolution in today’s financial services. The increased demand for and accessibility of cryptocurrency exchanges is expanding the global popularity of various DeFi systems. Along with it, cryptocurrency exchanges have grown in popularity among investors. As a result, industry experts expect a cryptocurrency to continue pushing changes to financial systems as you know them today.

Transactional And Banking Advantages

Acceptability and accessibility continue to receive attention as cryptocurrency use grows daily. In addition, the cryptographic technique and technology continue to evolve and advance, resulting in the development of a stronger cryptocurrency financial system.

Privacy

Because various cryptographic techniques power the systems, it allows for anonymity while transacting. These methods ensure data security, preventing sensitive information from falling into the wrong hands. All data sent is hidden from unauthorized individuals.

Security

Transactions made with cryptocurrency cannot be changed or forged, and the system transmits them over highly secure networks. On the other hand, entities can still trace financial records for proof.

Accessibility and Effectiveness

Cryptocurrency provides a viable and concrete solution in a world where a large population still lacks access to formal financial services. Dan Schatt and Domenic Carosa know that traditional banking is restrictive. People worldwide who do not have bank accounts can now take advantage of this financial model using Earnity, which provides instant access from anywhere, lower transaction costs, and quick transaction processing.

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Crypto Regulation Around the World

Regulation around cryptocurrency is still very unclear and governments around the world have very different ideas about it. While some jurisdictions are trying to ban it outright, others just want to have a bit more control over how it’s traded. Some jurisdictions still don’t fully understand crypto and still don’t know if it should be qualified as a currency or a security. Understanding regulations is very important for traders as they can have serious tax and legal implications. Let’s look at a few examples of how crypto trading is regulated around the world.

United States

Even if crypto trading and mining are very popular in the US, the country still doesn’t have a clear regulatory framework for cryptocurrencies. The SEC, the Treasury, and the Commodity Futures Trading Commission all see cryptocurrencies differently, calling them a security, currency, and a commodity respectively. Not only that, but the IRS classifies cryptocurrency as property, which further complicates things for traders.

The country has done a great job at regulating exchanges in the country, however. All exchanges have to comply with the Bank Secrecy Act and be registered with the Financial Crimes Enforcement Network. They also have to abide by the Anti-Terrorism Act and anti-money laundering (AML) legislation.

Japan

Japan is another country that has decided to embrace crypto, and like other regions has seen a rise in the popularity of crypto trading via a range of providers that seek to serve this booming market. These include “regular” crypto exchanges, to decentralized exchanges known as a DEX, to online brokers of crypto derivatives like contracts for difference. All locally based trading platforms have to be registered with Japan’s Financial Services Agency (FSA), which is one of the most rigorous financial regulatory agencies in the world. All exchanges have to be compliant with AML obligations as well. Crypto gains in the country are taxed under “miscellaneous income” and crypto is viewed as property from a tax standpoint.

United Kingdom

The UK, like many other countries, does not recognize crypto as legal tender, but as property. All exchanges operating in the country have to be registered with the UK Financial Conduct Authority. They also have to abide by special ‘know your customer’ (KYC) regulations and follow AMT and CFT guidelines.

Canada

Canada is one of the countries that has taken the most proactive measures to regulate crypto trading. All exchanges in the country have to be regulated by provincial agencies. The country is also one of the first to accept crypto derivatives by being the first to approve a Bitcoin ETF in February 2021.

Australia

Australia is relatively proactive when it comes to crypto and has some strict rules about what exchanges can offer services to Australians and even which coins they can offer. Australia is one of the only countries to formally ban privacy coins, and exchanges operating in the country have to register with the Australian Transaction Reports and Analysis Centre while abiding by AML/CFT regulations. Australia also has strict rules regulating initial coin offerings (ICOs) and crypto is treated as legal property under the tax code.

Even if most countries have similar legislation governing crypto, there are still some nuances. This is why traders living in these countries or thinking of trading within their borders should learn more about the regulatory framework in each country before starting.

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What to Do When Your Reverse Mortgage Becomes a Financial Burden

Did you take out a reverse mortgage? Many seniors consider reverse mortgages to deal with financial issues that they encounter during retirement.

There can be a lot of great reasons to take out a reverse mortgage. However, they are not without their own issues. You need to be aware of the potential pitfalls that you are going to encounter when you have a reverse mortgage.

Some of the problems with reverse mortgages might creep up on you over time. Fortunately, there are ways that you can deal with them.

Here are some things that you can do to offset any issues that were created by a reverse mortgage.

Consider refinancing your reverse mortgage

According to All Reverse Mortgage, “You can also refinance your reverse mortgage if you don’t like the interest or other terms associated with it. This might be your best option if you think that you will need to sell your property in a few years.” Refinancing will keep you from losing a large amount of money and interest. It would also be ideal if you want to make sure that your kids or other people inheriting your estate will get more.

The process of refinancing your reverse mortgage is very similar to that of refinancing a traditional mortgage. The only caveat is that you generally need to wait at least 18 months after taking out the original reverse mortgage before you can refinance it.

You should take a close look at your credit history before submitting a refinancing application. Your payment history keeping up property charges is going to be the most important factor for qualifying for a better HECM in most cases.

If your credit has improved since you took out the last reverse mortgage, you will possibly be able to qualify for that terms. You can also try to take steps to improve your credit score if you want to take preemptive measures to get a better deal. You should start by looking at your credit reports and seeing if there are any errors on them. Around 20% of all credit reports contain errors, which could be hurting your score. You should also take a close look at any outstanding debt that you have. If you still have a large amount of money from your reverse mortgage, then you should use it to pay off high interest debts, such as credit card bills. This will both boost your credit score and minimize your long-term expenses. It will be a win-win, especially if you get a cheaper read on your reverse mortgage.

You should also settle any possible liens on your property. They could be hurting your potential of getting a better read on your reverse mortgage.

Lease your home instead of selling it before you move

When you take out a reverse mortgage, the bank is going to give you money that will later be taken out of the value of your home. Unfortunately, you have to hold onto the property if you don’t want to pay the reverse mortgage loan back.

You might end up in a situation where you really can’t stay in your home. You might feel like you are a prisoner to your loan, because it is keeping you from relocating if you can’t afford to pay it back.

You might not have been concerned about this when you first took out your reverse mortgage. You probably thought that you would never relocate. Unfortunately, problems happen. You might get an unexpected divorce. You might develop health problems that prevent you from living in an area with bad weather or excessive pollution. Your kids might take new jobs in another state, which forces you to move as well if you want to be close to them.

Before you bite the bullet and sell your home to repay your reverse mortgage, you should explore other options. One idea that you might want to consider is leasing out your home and using the cash from it to pay for new housing wherever you want to relocate.

This might give you the best of both worlds. You get to keep the money that you secured from your reverse mortgage and have the flexibility to relocate at the same time. You don’t even have to physically deal with your tenants if you are willing to outsource that obligation to a property management company.

Explore property tax relief services

Property taxes are among the reasons that people when face problems with their reverse mortgages. You might be required to repay your reverse mortgage if you stop paying your property taxes.

You might be able to get ahead of the problem by seeking property tax relief services. The terms of these services vary between jurisdictions, so you should pay close attention to the requirements. The governor of Idaho recently signed a property tax relief bill, which is an example of how these services work. If you are eligible, you might avoid property tax problems that could trigger a requirement to repay your reverse mortgage.

Make sure that you are reverse mortgage is a benefit rather than a liability

There are a variety of reasons that reverse mortgages have become popular in recent years. They really do offer a lot of benefits. However, there are some situations where they could become a burden, so you need to take steps to avoid that from being the case.

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Robert Testagrossa – Why NFTs Work So Well

NFTs are a hot topic at the moment and we are seeing many companies set up by experts like Robert Testagrossa which are focused towards the rising success of NFTs. This isn’t necessarily a new idea, it is in fact one that has existed for a number of years now, but in recent months we have see an enormous focus on this aspect of the blockchain.

Today then we are going to take a look into what NFTs are and why they work so well for all parties involved.

Breaking Down an NFT

To those of you who aren’t sure what an NFT is, this stands for ‘non-fungible token’ in layman’s terms this means that it is a digital product which is not fungible, or transferrable across the blockchain. We can use NFTs in artwork, music, event tickets and many other forms of token. Those who buy an NFT, in whatever capacity it takes, will be the sole owner of that token. This can be resold by the owner, but the address for the NFT will always remain the same.

Security

One of the biggest reasons as to why NFTs work so well is that they are an incredibly secure way of passing on and storing information. Back in the European Championships in 2016 we saw tickets being delivered as NFTs, which made them much more secure that paper tickets or even emailed tickets. This can also greatly help with concert tickets, which are often bought and sold by scalpers who drive the ticket prices up, and restrict people from having tickets. NFTs is a great way to solve this problem.

Control For Artists

In the world of art and music we are seeing time and time again that artists are not making the money that they should do from the work which they are completing. There are so many record companies for example who rake a huge cut from the artist’s work, as well as art houses who take a slice of artwork created. Using NFTs mean that the artists no longer need that third party in order to get their work out there. This gives them the power to release as many NFTs as they like, and it means that they will end up with an overwhelming proportion of the money which is made from sales.

Increased Demand

And finally, as more and more people learn about what NFTs are, and more and more professionals jump onto the possibilities of NFTs, we are going to see a huge increase in demand. This has already started of course and many NFT artworks are being snapped up each and every day, by people who perhaps usually wouldn’t. This increase in demand is great for everyone involved with NFTs.

The possibilities for this technology really are endless and in the coming years we are certainly going to be seeing big changes within the world of NFTs. What do you make of this new technology?

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Traynor Capital Management Reviews – Why You Should Trust Asset Management Companies

If you have a lump sum of money and you ask people what you should do with it, the large majority are going to tell you to invest it. This is all well and good of course but what gif you don’t actually know how or where to invest it? Even in such a situation you can still entrust your money to a great company which will help you to reach your financial goals.

I was looking for a capital management company a couple of years ago and after reading the Traynor capital management reviews, I knew that this was the firm for me. Many lack trust in asset management companies but here is why that is a school of thought which just isn’t correct.

Absolute Transparency

This is not a case of you handing your money over to someone and then waiting for months on end to fin out how they got on. In fact from the moment that you invest with them you will have absolute transparency in all that they do with your money. These companies se up dashboards which you are able to use to assess where your money is being invested and what the current star is of your investment. This is certainly something which builds trust between you and the company.

Risk Management

The level of risk which they take with your money is entirely down to you, and when you first invest with them you will have a full discussion on what you are looking to achieve, and how much risk you wish to take. This can be altered at any time and you can also select a certain risk based on a particular percentage of your money. This gives you absolute control over the level of risk which you are going to take.

Tight Regulation

The days of investors and brokers going rogue is all but over in the modern world, because this has happened too many times before. The result of this is tight regulation which means that nobody acting on your behalf can do so without making things crystal clear with you. We just spoke about risk, which is a great example here. Should the firm take on a larger amount of risk than you have agreed with them, and lose money as a result, you will have complete protection because of the tight regulations which are in place.

No Point

Ultimately, there really isn’t much to gain from robbing investors in the short term. If this happens then the company’s reputation will be in tatters and they will never be able to make money again. These businesses are set up with integrity and the more money that they are able to make on your behalf, the more money that they will make for themselves. This again is why there should be absolute trust here, because there is no point in acting in bad faith for them.

Trust the experts and let them put your money to work.

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What Are Alternative Credit Scoring Models?

If your business offers credit to customers, it’s vital to verify whether a potential customer is likely to be a ‘good’ borrower. To do this, companies typically use credit scoring to assess whether or not to lend to an applicant. Therefore, the credit scoring model you use has a major impact on how many customers are offered credit and, ultimately, the success of your business.

Although companies have traditionally relied on data from credit bureaus to assess an applicant’s creditworthiness, there are now new and innovative ways to determine whether an individual is likely to be a ‘good’ borrower. Read on to learn more about alternative credit scoring models and how to use them…

How Do Alternative Credit Scoring Models Work?

Traditional credit scoring uses a fairly limited range of data to determine a person’s creditworthiness. In contrast, alternative credit scoring models use data from a wider variety of sources. A credit bureau might calculate a person’s credit score based on their banking history, mortgage payments, and wages, for example, but overlook things like mobile payments, rent payments, and/or cryptocurrency payments. By incorporating these elements and other types of data, businesses can obtain a more accurate credit score and make more profitable, low-risk lending decisions.

Essentially, traditionally credit scoring is an outdated way of assessing a person’s creditworthiness. An alternative credit scoring model incorporates the wide variety of factors that make up an individual’s financial situation and, therefore, gives lenders access to the data they truly need when making decisions.

Are More People Approved via Alternative Credit Scoring?

When you use alternative credit scoring models, it can mean that a higher percentage of applicants are approved for credit. However, this doesn’t necessarily equate to organizations taking higher risks. In fact, many alternative credit scoring companies have collated data that shows lenders reducing their losses by switching to this innovative method of credit assessment.

Crucially, alternative credit scoring can ensure that people who would unnecessarily be denied credit due to outdated, traditional methods of credit scoring are no longer overlooked. Someone who rents a property has no direct debits or even no bank accounts would typically find it difficult to obtain credit when traditional credit scoring systems are used, for example. Despite this, they could be a low-risk applicant with outstanding financial management skills.

By using a wider range of data to assess them, an alternative credit scoring model gives the lender a more accurate overview of their viability as a borrower. As a result, lenders can tap into this lucrative target audience while providing borrowing opportunities to individuals who have been historically penalized through no fault of their own.

Incorporating Alternative Credit Scoring into Your Business

If your company is already credit scoring potential customers, switching to an alternative credit scoring model is a simple transition. Whether you develop bespoke software, use a SaaS platform or install a suite of analytics programs, incorporating alternative credit scoring into your business can be simple, straightforward and highly lucrative.

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Is Saving Money Your Strong Suit in Life?

Saving money is something that many consumers try their best to do.

That said it does not come as easy for some folks as it does others.

When you need to save some money and still get enjoyment out of life, how do you attack the matter?

By being smart with money, you can enjoy a happier life more times than not.

How Can You Improve Your Finances?

In looking for more success with money, here are a few things to think about:

  1. How can you save more? – When you are searching for more ways to save, leave no stone unturned. This means you look for a myriad of ways to save. Do you get online all that often? If not, you are missing out on some great resources. Use financial expert blogs, videos, podcasts and more. They can be a great help to you in offering you tips on how to keep more of your hard-earned dollars. Also turn to outside family and friends for their money-saving advice.
  2. Capturing deals when you can – Have you done a pretty good job of capturing deals over the years? If not, now would be a good time to start doing so. As an example, if you like to travel, be it day trips or longer excursions, are you locking in savings? From Disney Dose Disneyland discount tickets to sports, concerts and more, find deals. You can also find deals in your local grocery store. Given the amount of money consumers tend to spend on food and related items, those bills can add up rather fast. Make sure you are getting the best savings possible. Many brands offer rewards cards. As you build up points over time, you are rewarded with savings.
  3. Don’t let interest fees eat into finances – One of the worst things you can do is to let interest fees eat away at you. That said you should make sure you pay off any bills in full whenever possible. This means you avoid those fees that so many companies tack on. If you have a credit card with a sizable balance and you are only paying the minimum each month, those fees will add up. When they do, you might as well be tossing money out the window.
  4. Thinking about the future – It goes without saying that you need to have one eye on the future as it relates to money. With that thought in mind, are you doing enough to save for retirement? It is important to make sure you have as much money as possible socked away for when that time comes. If you fail to do this, you could end up in financial trouble. That means trouble with healthcare expenses, your living arrangement and more. Work with a retirement specialist now to prepare for when the day arrives you are retired and do not have a regular paycheck coming in.

As you navigate the financial roads of life, is saving money your strong suit?

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Tips for Achieving a Debt-Free Life

Some 189 million Americans have credit cards with the average balance per household being $8,398. Keep in mind, that’s just credit card debt. We haven’t mentioned mortgages, car loans or student loans.

Sadly, debt is so prevalent in America, most people consider it a way of life.

However, it is possible to live without it.

Here are some tips for achieving a debt-free life.

Create an Emergency Fund

If you have yet to do so, make it a priority to put away at least three to six months of your monthly expenses as a hedge against income disruption or large unexpected expenses. Having this money put away will enable you to weather such instances without incurring more debt — or at least as much as you would have otherwise.

Prioritize Paying Off Debt

As common sense as this particular tip may seem, most people have no idea how to do it.

Let’s say you’re one of those people who have four credit cards, with the total balances adding up to $8,398. Let’s say the balance on one of the cards is $3,000, another one is $2,500, another one is $1,500 and the last one is $1,398. Now, let’s say the minimum payment on each of those cards is $50, and you’ve been paying $100 per month on each one.

That’s a mistake; it’ll take too long to pay them all off that way.

The Debt Snowball

Instead, make the minimum payment on all of them except the one with the $1,398 balance. This will afford you $250 monthly to pay toward that one, which will help you pay it off more than twice as fast as when you were only paying $100 monthly.

Once you’ve eliminated that balance, you’ll have $300 monthly to put toward the $1500 balance, which will also have been being paid down at the rate of $50 monthly while you were killing the first account. Repeating the process with each successive card will give you the entire $400 to put toward the highest balance when all of the others are cleared up.

You’ll pay off all four cards much sooner than you would at the rate of $100 monthly on each one.

By the way, this works with car loans and mortgages too.

You can eliminate all of your debts with this method.

Debt Consolidation

Another way to approach debt elimination is with a credit card consolidation loan. While it might seem a bit backwards to make debt to get rid of debt, there are situations in which credit card consolidation can make sense.

You have to make sure the consolidation loan you take will let you pay your debts off sooner than you would by paying them individually. You’ll also want to seek a lower overall interest rate and a lower overall monthly payment.

Focus on Saving and Investing Next

With your debt eliminated, you can turn your attention to preparing for the time when you’ll no longer go to work every day. In other words, it’s time to start building your retirement fund.

We recommend eliminating debt first because the interest you’ll pay vs. the interest you’ll earn tends to be higher. Eliminating debt effectively means your money earns more interest afterwards — thus it’s a good investment.

Create a Spending Plan and Stick to It

One of the most fundamental of the tips for achieving a debt-free life. Creating a spending plan helps you ensure your money is working for you in every way possible, as opposed to against you.

Your goal should be to live on 80 percent of your income or less, while saving/investing at least 20 percent or more for your long-term goals. This becomes easy to accomplish with your debt laid to rest. Plus you’ll be able to save more so you can make subsequent purchases in cash, rather than charging them.

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