Informed Choice chartered financial planner Martin Bamford was quoted in the Independent today, in a feature looking at spread betting.
Commenting on spread betting in the introductory article, Martin said that he would advise clients to stay away from spread betting.
“It owes more to gambling that it does to investing. The fact it is regulated in the UK by the Financial Services Authority is more or less the only factor that makes it come under the definition of investing.
“On that basis, it is incredibly speculative investing and only for the most experienced and adventurous investors.”
Martin goes on to explain that any activity where the potential losses far exceed the original money wagered need to be treated with extreme caution.
“Get it wrong and you could lose everything. The ability to make substantial tax-free profits will continue to attract investors to this form of gambling, including some who are entirely unsuited to the risks involved.
“As with all gambling, there is the risk of addiction, and the isolated nature of betting online can increase this risk.”