I’m new to investing, and I heard from smart people on the internet, that the best beginner strategy to investing is to just consistently invest into S&P 500 in a regular basis. Armed with this knowledge, I made an eToro account and bought into this index. When I made the trade I saw there’s CFD text on it, which I didn’t see when I looked at trading Tesla, or Microsoft.
I saw on your site that a huge number of CFD traders lose money, which gets me confused. It also looks like I’m getting charged a weekly fee due to the index I bought being a CFD.
Is this fee normal when investing in indices? Can I avoid it somehow as a European citizen?
thank you for your comment. First of all, CFD products are mainly for speculation and are not great tools for investing. The product you sent me is a CFD and not For example, CFDs are leveraged products, and using leverage has a cost (called funding fees or overnight fees), which is charged every day. Holding a CFD for a year could cost even 7-10% per year.
Rather, ETFs would be great for long-term investing and that’s the most typical way how people invest in the S&P 500. You can find ETFs at eToro if you click on this link: https://www.etoro.com/discover/markets/etf So if you use these ETFs, you wouldn’t have that fee that is charged at CFDs.
If you have any other questions, please let me know.