Long-term investment

[collegeboy]

Are CFDs a good long-term investment?

[Lisa]

Since CFDs are traded on margin, and therefore traders are charged interest on their bets, they're not profitable long term. If you want to make a long term investment, then traditional investing is much cheaper because the 0.5% stamp duty on the purchase will be less than the interest expenses incurred by holding a CFD for a long period.

[pipstranger]

Because the costs associated with a cfd increase over time, you are better off buying the actual stock than a cfd.

[nadine]

CFDs are great short-term investments, provided you get the market right.

[SJCFDs]

Yeah lets not forget that buying physical equities requires money up front to the full value of your investment. You cant earn interest income on funds that have been exchanged to buy equities.
Trading CFDs on margin means that only a fraction of that cost is tied up, therefore leaving a larger percentage of the equivilant investment to buy equities free to earn interest income in a saving account or similar.

Whether interest charges/income makes CFD tarding more or less profitable than holding equities long term depends entirely on your leverage multiple, and the differential between interest rates charged by your CFD provider and the savings interest rate you are offered (by banks, building societies etc.)