Why All CEOs Should Understand the Financial Markets

Why All CEOs Should Understand the Financial Markets

Have you ever wondered why some people and businesses just never seem to struggle with their finances? It may be that they earn a similar amount of money to you and have similar turnover to your business, but for some reason they are able to afford a somewhat better lifestyle and their business never seem to worry about cash flow.  In all probability, it will come down to the way they handle their financial affairs and not because they have had some sort of financial backer, windfall or lottery win that they have kept schtum about.

Managing finances well is paramount if you are to build a business and enjoy a stress-free and comfortable lifestyle. Gone are the days when it was as simple as opening a savings account with a good rate of interest, paying into it monthly and watching it grow or relying on the stable Dollar when dealing with import and exports. With interest rates being so low and so low for so long, this way of accruing money is unrealistic and so you need to be a little more pro-active.

Investing

With a little application, understanding the way financial markets operate will give you an excellent foundation from which to build a solid financial strategy. This is all-important when setting out on the road to financial wellbeing, because what happens on the markets affects everybody’s financial status to some degree.

The financial markets are more accessible than ever, this is, in the main, due to digital technology and the rise of online trading platforms like the ones offered by ETX Capital. These online trading platforms allow individuals the opportunity to trade the world markets and you don’t need a great deal of money to start off with. Once you have set up an account, you can choose from a wide range of markets on which to trade, the foreign exchange markets (Forex) for example or commodities.

Before you start to invest, however, it is crucial that you understand what you are doing and one way to do that is trade using a demo account before you start trading with real money. Using a demo account allows you to get to grips with the software, the jargon and of course, the way the markets work.

Trading with a sensible proportion of your savings and a disciplined strategy can be a very effective way of accumulating wealth and can be done from your smartphone, tablet or desktop.

The Global Picture

To have a broader understanding of how the global markets work, you need to follow world politics and economics very closely. What happens here, ultimately affects how the markets behave and a great example of this is the recent Brexit vote.

Immediately after the UK public voted to leave the European Union, shockwaves were felt all across the global financial markets, the pound plummeted, as did many other markets. Traders who reacted quickly enough to the news would have made great gains and those who didn’t would either have watched as an opportunity passed them or suffered losses.

Setting up a reliable news feed and monitoring it closely will go a long way in helping you decipher what may or may not happen to the financial markets next.

Investing your money wisely means taking an active interest in the process, you need to look at it as being part of your job, constantly moving it around, saving and investing.

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