Why Plus500 is Not Suitable for Long-term Stock Investments

When considering options for long-term investments in stocks, it is essential to differentiate between various trading platforms aimed at different investment strategies. While Plus500 has expanded its offerings with 'Plus500 Invest,' it primarily operates on a platform highly reliant on CFDs (Contract for Difference), which is far from ideal for investors looking to hold stocks for extended periods.

Understanding Plus500 and Plus500 Invest

Plus500, as a well-known trading platform, once primarily focused on CFDs, making it more suitable for short-term traders and speculative investors. Recently, Plus500 has introduced 'Plus500 Invest' with a purportedly better interface and stricter regulatory compliance, potentially making it closer to a traditional investment platform. However, the platform remains heavily dependent on CFDs, which are not aligning with the goals of long-term stock holders.

For investors looking to hold stocks for the long term, other platforms such as Interactive Brokers and DEGIRO are more fitting options. These platforms offer a wide range of securities, including shares of individual companies, making them well-suited for those aiming to gain ownership stakes and participate in corporate decisions through voting rights and other shareholder privileges.

Why Plus500 is Not Ideal for Long-term Investing

Contrary to the perception of Plus500 as a legitimate investment tool, concerns abound regarding the platform’s reliability and user experience for long-term investments. According to some users, the 'algo' (algorithm) used by Plus500 is often seen as 'scamy,' with critics pointing out that it operates more like a gambling environment than a traditional investment platform.

When investing in real stocks, the process involves purchasing through a brokerage or a reputable bank, where you become a genuine shareholder. Owning shares comes with the right to vote in company decisions, and the more shares you own, the greater your voting power. In stark contrast, CFDs and forex trading, as offered by Plus500, are considered gambling rather than legitimate trading. They involve speculative bets, often leading to significant financial losses for inexperienced traders.

Why Other Platforms Are Better for Long-term Stock Investments

Interactive Brokers and DEGIRO stand out as better options for long-term stock investments due to their focus on providing a comprehensive range of investment services:

Interactive Brokers: Offers access to a wide range of securities, including US, European, and Asian stocks, as well as options and futures. They also provide robust trading platforms and extensive educational resources to help users make informed investment decisions. DEGIRO: Renowned for its low trading commissions and flexibility, DEGIRO allows investors to trade multiple financial markets, including stocks, bonds, ETFs, and CFDs. While CFDs can be risky, DEGIRO supports a more balanced approach for users seeking diverse investment opportunities.

Another platform, Trading212, is also worth considering for long-term stock investments. They offer a variety of stock options in the UK and USA, along with diverse indexes and CFDs. Plus500, however, is less suitable for holding stocks long-term, as it was never designed for such purposes. For those curious about Plus500, there are numerous resources available for trading insights, including videos and blogs.

Conclusion

The primary issue with Plus500 is that it is not aligned with the objectives of long-term stock investment. While it may be suitable for short-term forex, CFD, and other speculative trading activities, it falls short when it comes to genuine stock investment. Long-term investors should carefully consider their options and opt for platforms that prioritize transparency, diversification, and the ability to build genuine shares over speculative bets. For more detailed insights on trading with Plus500 and other options, check out the relevant resources available online.