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How to Create Realistic Financial Projections

Stock Market

How to Create Realistic Financial Projections

 

There are many components that need to be included in your business plan to ensure the success of your company. Financial projections are one aspect that is often overlooked by entrepreneurs because they don’t think it matters. 

Unfortunately, without financial projections, there is no way for you to know how much money you will make or how much money you might lose over time. These projections will help inform your decisions about cash flow and give investors insight into the effectiveness of your business model. 

Creating accurate financial projections is important for any entrepreneur. So read on for tips from Dividend & Whisky to learn how you can benefit from them and how to create them.

The Importance of Financial Projections

Financial projections are a summary of the company’s projected financial performance over a specific period of time. These projections are typically done in the form of a spreadsheet, and they include financial information about the company, such as revenue, expenses, cash flows, capital structure, and net income. 

Financial projections also aid you in monitoring your cash flow. You can use these figures as a way to determine whether you need funding in various parts of your company. Moreover, with accurate projections, you can more closely determine how much taxes you will have to pay at the end of the year.

Most states require you to provide annual reports to ensure your compliance. If you fail to provide your state with the proper data, you could owe fees and be penalized. At worst, you could lose your right to do business in your state.

Of course, you can avoid such concerns by planning ahead with financial projections. This will allow you to stay on top of your company’s financial status throughout the year.

How to Create Financial Projections

If you’re an entrepreneur or have a business, then chances are that you are working on creating your first set of financial projections. These financial statements provide the essential information for investors to make decisions; they let you monitor cash flow, determine where you need additional finances, and more.

At its core, the purpose of financial projections is to forecast and measure the performance of your business over time. The basic structure for financial projections is:

  • Projected Income (from sales, interest, and other sources) 
  • Projected Expenses (from operating costs, depreciation, and more) 
  • Projected Cash Flow 
  • Projected Net Income

You can create a financial projection by following these steps:

  • First, you need to find your financial statements for the past one to three years. A financial statement is a document that summarizes the financial performance of a business across different categories. These statements often include annual reports or tax returns.
  • Second, you need to fill in all the necessary information on an income statement template. You can find many different sources online that host templates. The information you will provide includes dates, revenue sources, expenses, and net income. 
  • Third, you’ll need to calculate the average monthly balance of cash on hand over the last one to three years.
  • Fourth, apply the appropriate numbers to your template.

If you want to make things easier on yourself, consider using software like Prophix or Adaptive Planning. 

With accurate financial projections, you can see critical figures that tell investors how much money you have available each month to make investments, pay off loans, and use capital towards other essential areas of your company.

Image via Pexels

 

4 Ways to Save Your Business From Unhealthy Debt

Stock Market

4 Ways to Save Your Business From Unhealthy Debt

The financial health of your business should be your highest priority as an entrepreneur. You have likely committed a great deal of time, effort, and capital to your enterprise. For that reason, falling deeply into debt can be a scary experience that you might do anything to reverse. When the operating costs of your venture put your finances into the red, there are still steps you can take to get your business on a healthy path.

 

  1. Establish a Workable Budget 

Excessive spending is the quickest route to debt, so it stands to reason that adhering to a budget is one way to reverse a bad financial situation. By taking note of past revenue and making accurate financial projections for future income, you can determine a monthly budget that will allow for healthy net profits. Reducing expenses to meet your new budget may seem difficult, but many small changes can make it possible. A few common saving methods to implement in your business may include:

  1. Review Your Invoicing Process

When clients reliably pay for your services on time, you will be better equipped to manage your finances and pay off your own obligations in a timely manner as well. That is why you must have an effective invoicing process in place.

If your invoice practice needs work, consider using an online invoice maker to utilize pre-made templates and customize them with appropriate imagery and your business logo. An attractive and well-formatted invoice will convey a professional tone that can increase the likelihood of clients paying you quickly. Be sure that your invoice generator allows you to download your forms as a PDF, spreadsheet, or any other format of your choice.

  1. Explore New Revenue Options 

It can be all too easy to focus on a single business strategy and work tirelessly to improve upon it. However, an increase in your debts may necessitate entirely new revenue streams altogether. One option for long-term growth could be to reallocate funds into dividend stock investments. For a more involved approach, you can conduct market research to find new advertising strategies and potential products that would appeal to audiences within your niche.

  1. Work With Experienced Professionals 

Debt management is a special skill in itself. To reach the quickest and most effective resolution to your potential financial crisis, it may be necessary to consult with a professional with experience in overcoming debt. A financial advisor can answer specific questions you may have about your unique situation and help you make informed, guided decisions on how to proceed.

Building a strong connection with an advisor can benefit your business even in times of great financial health. Wealth management experts cite accurate financial forecasting as a powerful benefit to working with an advisor, as this can help you plan for the future and enable you to pursue greater opportunities.

Debt is a double-edged sword that can help you generate new income, but it can also become an overwhelming burden in the blink of an eye. Experiencing heavy debt can be disheartening to a business owner, but the resources at your disposal can help you turn your finances around. When your enterprise emerges from what seems like a drastic situation, you may find that the new tools you have found can help your venture thrive like never before.

Image via Pexels

Best Stocks to buy now – UK

Stock Market

Best Stocks to buy now – UK

2021 was a volatile year for the stock market. From the sell-offs to record highs, the market has tested investors’ ardour. Buying a stock is easy, but you have to consider long-term performance, not short-term volatility. To help with that, we have chosen the two best stocks measured by their performance in one year.

Since the bear market during the pandemic, stocks are back stronger and better. The rebound was powerful. There are a lot of great opportunities out there for long-term gains, choosing the right stock is key.

If you are pleased with your past performance but want more success in the future, these value stocks might be worth looking into. In the hopes of finding the best value stocks in the UK, we have looked for:

  • Companies with a market value of at least £1 billion

  • Companies with strong analyst support

  • Companies that have a price-to-earning ratio below the broader market.

If you’re looking for more stability as we enter the new year, take note of these names.

Crucial Ingredients for Buying Stocks

There are thousands of stocks trading on Nasdaq and NYSE, but you want to add the ones with massive gains to your portfolio. The CAN SLIM strategy provides you with great insights on choosing the best stocks. Look for companies with new services and game-changing products, invest in stocks that have recent annual and quarterly earnings of 25%. Also consider companies that have low profits, IPOs, that would later generate massive revenue growth.

In addition, watch for the demand and supply of the stock itself, place your focus on leading stocks in the industry and aim for stocks with good institutional support. Once you find a stock that fits all these criteria, you can turn to the stock charts to plan an entry point. Ideally, the stock should form a base, then buy at the buy point with heavy volume.

Best Stocks to Buy now

IBSTOCK

IBSTOCK PLC focuses on selling concrete and clay building products in the United Kingdom. They manufacture clay, brocks, brick components, concrete stone masonry, concrete fencing, concrete roof tiles, concrete rail products, pre-stressed concrete. The company also produces walling stones, architectural masonry products, facing bricks, cats stones, retaining walls, facade systems, roofing tiles and accessories, fencing bollards, path edgings, caps and coping and urban landscaping products.

Apart from selling building material, IBSTOCK offers services like curing, engraving, supply and fitting solutions. Their products can be used to build new houses, maintenance, and repair. The company sells its products under Supreme, Anderton, Forticrete and Longley brands to consumers in the construction industry.

As we write, IBSTOCKS are currently trading for 204p. A year ago, the shares were trading for 200p, but they reached a 239p high in August. The share price has moved up and down in recent months due to the weak economic outlook. But since December, IBSTOCK shares have increased slightly.

Since the IBSTOCK trading update at the beginning of November, the company confirmed that the demand for its products is still strong. It also announced an investment into its growth: a £50m investment into a factory. The company has a good track record of performance. For three years, the revenue and gross profit o have increased yearly.

Since the pandemic has begun, the UK market has experienced surprising growth. After the initial freeze during the lockdown, people have been buying more properties. The Uk government stamp duty holiday also aided the boost. A lot of shares in the construction benefitted from this, housebuilders like Barratts recorded high profits.

Analysts believe that IBSTOCKS earnings will increase by 19.78% in 2022. Leaving it at a price-to-earnings growth ratio of 0.5 for 2022. Any PEG ratio below 0.2 suggests the company is undervalued. IBSTOCK also has a dividend yield of up to 2% and it resided at 1.8% at the FTSE 250 index average.

Macroeconomic issues like rising cost of materials, end of stamp duty, supply chain crisis all add to the increase in interest rates that will affect the housing market in general and suppliers like IBSTOCK. Also considering the current levels, IBSTOCKS are cheap shares not to be missed. It has a good market share and a long history of growth and success. Plus the dividend it pays adds to your passive income stream.

Royal Mail

Royal Mail released its trading update HI 2021/2022 on 18th November. The firm’s revenue increased by 7% to £6.1bn with the pretax increasing by 18 times making it £311m in the half-year ending 26th September. This result shows that the Royal Mail( LON: RMG) share price is up by 10%. Trading at 505p right now, Royal mail shares are up by 21% in the past month, a 70% increase since last year. The share price is still up 127p off a five-year high of 631p that it was in May 2018. But with Christmas deliveries, the share price might soar higher.

The company also announced it would be paying £400m back to investors. This would be paid through £200m special dividends and £200m share buyback. They also announced that a £67m interim dividend would also be paid. This is a big plus for investors and also a way to drive new ones in.

The group’s non-executive Chair, Keith Williams, announced that the extra capital generated from a great year would be put back to improve the technological capabilities. The company didn’t fluff about this as they recently unveiled a new automated sorting parcel machine at the Tyneside site. This machine can sort up to 180,000 parcels per day. This would be very invaluable during the Christmas period, as there would be a lot of items to ship.

Royal Mail Share price: HI 2021/2022 Results

Revenue increased from £5.671 billion to £6.072 billion each year, which is a 7.1% growth. The operating profit hit £404 million, and the operating margin also increased from 0.7% to 6.7%. The net debt was nearly reduced to half from £1 billion to £540 million. In-year trading cash flow of £298 million increased by 36.1% and net cash also increased from £47 million to £685 million. Clearly, This is a great growth pick that deserves your attention.

Best Cryptocurrency Stocks Worth Investing In 2021

Stock Market

Best Cryptocurrency Stocks Worth Investing In 2021

Even to this day, cryptocurrencies continue to take over the world by storm. This is even more so because Bitcoin (BTC) is now worth more than $60000 each. An increasing number of financial institutions and businesses have chosen to take up Bitcoin. This certainly makes exposure to cryptocurrency an easy feat.

Having said that, investors at times wish to steer clear of the issues and hassles that emerge when investing in cryptos themselves. In case that is you, the cryptocurrency stocks we will discuss here will help you gain exposure to cryptocurrencies in a conventional way.

By investing in these stocks, you can avoid the difficulty of trying to purchase cryptos and figuring out where to put them up. However, the majority of them are highly correlated to the difference in the basic cryptocurrency they are connected with.

The following stocks we are about to discuss will provide investors with different exposure levels to cryptocurrencies. It will cover Bitcoin stock plays and more conventional digital ledger, as well as various other hypothetical stocks.

At any rate, do remember that in case cryptocurrencies suffer a loss, the stocks are most likely to fall as well. They will collapse even faster in comparison to the basic crypto.

The following nine companies include:

  • Riot Blockchain, Inc.

  • Marathon Digital Holdings, Inc.

  • Roundhill Ball Metaverse ETF

  • Grayscale Bitcoin Trust

  • MicroStrategy

  • Coinbase Global Inc.

  • NVIDIA and AMD

  • CME Group

  • International Business Machines Corporation

Top Nine Cryptocurrency Stocks to Consider

Here are the top Nine cryptocurrency stocks worth investing in. We took into consideration the business bases that guide their gains, their connection to the crypto system and end users’ interest in their services/products.

Riot Blockchain, Inc.

First on our list, we have Riot Blockchain, Inc. Located in the US, this particular digital company mines Bitcoin. Riot is tied to the Bitcoin blockchain, and it continues to promote the coin mining greatly.

The objective of the company is to become one among the greatest and most economical bitcoin producers in the North American region. It is set to build, support and operate systems of blockchain technology.

According to the recent event, Riot Blockchain is said to invest $35 million to gain additional mining capacity, called the Bitmain Antminers. This brings its resources to around 37000 miners.

Currently, Riot Blockchain is also identified as one among the few companies listed on NASDAQ in the United States. With Bitcoin rising recently, the company stock has had great success as well.

At present, its shares sit on profits of more than 1400% over the last six months. Even so, the company does not seem to have any plans to stop anytime soon.

In the initial three months of the year 2021, there was an increase in total cash as well as Bitcoin to more than $270 million. However, Riot Blockchain overlooked market indications on 3-month interval revenue and gains for every share.

The company, nevertheless, reported a quarter-over-quarter improvement of over 60% in overall mined coins, all the while announcing gains results.

Furthermore, the company Citadel Investment Group located in Chicago, is a major investor in Riot Blockchain. It owns shares of more than two million that are worth over $120 million.

Similar to Tesla, Inc., and Coinbase Global, Inc., Riot Blockchain, Inc., is an incredible cryptocurrency stock to put your trust and money on.

Marathon Digital Holdings, Inc.

Next is Marathon Digital Holdings, Inc., the digital firm that focuses on cryptocurrency mining as well as other digital resources. It aims at developing a massive platform for miners mining Bitcoins where they can get the coins with less hassle.

The firm provides the computing capacity which is needed for mining BTC. The platform they provide allows the consumers to mine the coin by joining forces with other users in a pool. Whenever this happens, the paydays increase and are usually higher.

Marathon Digital Holdings, Inc. was said to tie with the Russell 2000 index, which measures the small capital companies’ performance located in the US. The CEO of the firm, Fred Thiel, stated that its reason for tying with the index was to boost visibility to shareholders and investors.

In June, the company declared its mining of more than 225 Bitcoins in the month of May. This is a 40% increase in comparison with the coin production in the month of April. At present, it now owns a total of 5518 coins which is worth more than $200 million.

In August 2021, the firm announced the updates of its mining operations and BTC production for the month of July. Above all, there was a significant increase in the monthly production by over 65%. The overall BTC holdings increased to roughly 6225.6 BTC.

Furthermore, the company obtained around 19401 S19 Pro ASIC miners through Bitmain along with extra 4287 miners presently in motion. Amazingly, it currently has over 19350 miners that produce 2.09 EH/s.

On the 1st of August 2021, Marathon Digital Holdings, Inc., also declared its investment in purchasing extra 30000 Bitmain miners. All in all, investing in this particular cryptocurrency stock seems to be a great option, especially in the long run.

Roundhill Ball Metaverse ETF

Our following topic focuses on one of the exchange-traded funds (ETFs) that identifies blockchain stocks. This firm gives exposure to ‘Metaverse,’ which is considered as the existing Internet’s beneficiary, as a component of FIR, i.e., the Fourth Industrial Revolution.

According to recent studies, whatever that grew in the FIR times involves three distinguishing features, that includes:

  • Super-intelligence

  • Hyper-connectivity, and

  • Hyper-convergence

This particular revolution focuses on converging each information technology in order to build a new world known as the ‘Metaverse.’ As a result, the term ‘metaverse’ signifies a collective virtual platform beyond space where both the FIR and the COVID-19 bring in the tech-savvies.

Roundhill Ball Metaverse ETF, with 50 holdings, traces the Ball Metaverse Index’s returns. The investment began its trade in the month of June and had more than $35 million in resources. To put it another way, this firm is a young and small-scale ETF.

With regards to the breakdown of its sub-sectoral, the computer unit part forms the highest segment with over 26%. Following that is the gaming platform, end-user electronic parts and cloud solutions with 19%, 8.9% and 22.7%, respectively.

The Roundhill Ball Metaverse ETF was developed with the aim to let people make an investment in the metaverse and gain an advantage out of it. It gives exposure to universally listed businesses actively engaging in the metaverse, its activities or those that provide technologies, services, products, technical skills, etc.

Under normal conditions, a minimum of 80% of investment’s net commodities will go to Metaverse Companies. This may also cover the investments in SPACs or ADRs. Its finance is undiversified.

At the moment, some of the firm’s top holdings include NVIDIA, Autodesk, Tencent, Amazon, Roblox, Unity, Facebook and Microsoft, among others.

Grayscale Bitcoin Trust

While one may think the Grayscale Bitcoin Trust is the same as an exchange-traded fund (ETF,) but technologically speaking, it is not. Nevertheless, it does perform similarly to an ETF.

The firm is created on trusts like the SPDR Gold Trust (GLD), which stands for physical and genuine holdings of the basic asset. You can access your commission account and purchase GBTC shares similar to how you would the Gold Trust.

In addition, Grayscale Bitcoin Trust lets you trace the Bitcoin holding prices. However, you cannot get money for your actual Bitcoin shares, just like how the majority of the asset ETFs work.

This firm does not make trading on any major exchanges. It makes the trading ‘over the counter.’ Here, there is no need for registering with the Securities and Exchange Commission (SEC.)

Generally, ETFs make trading in close collaboration with the net asset value (NAV,) which implies that you get what you purchase. Nevertheless, Grayscale Bitcoin Trust trades at a considerable premium or discount. This means you may invest in BTC for very little or very much as compared to its actual worth.

In the year 2017, the pricing of BTC went figurative, and dealers got into the Grayscale firm. This sent the net asset value to a premium of over 100%. Usually, the company had made trading at a premium.

Nevertheless, after the high auction in BTC prices in the months of April and May, the shares closed at a discount of over 12%. This to the BTC value that the company holds.

If Bitcoin ETFs get accepted, there are chances of Grayscale Bitcoin Trust’s probable demand crashing since ETFs costs may be lower. In case this occurs, all premiums would disappear, meaning the price will decrease despite BTC prices remaining high.

Having said all that, Grayscale Bitcoin Trust is an ideal option for stakeholders and investors wanting to purchase Bitcoin within their commission account only. This is especially true because of the firm’s existing NAV discount.

MicroStrategy

One other cryptocurrency contender standing on top is MicroStrategy. It is a prominent firm that provides analytical services as well as business intelligence.

Through its channel, the firm provides companies worldwide with industry-leading analytical enterprises. Some noteworthy organizations include Accenture, 3M, Amazon, etc.

MicroStrategy has been investing in a huge amount of Bitcoin. For instance, the firm bought around 70780 BTC for $16000 each last year. Therefore, MicroStrategy stocks are gaining great success, all thanks to the company’s increasing Bitcoin funds.

This particular firm is favored by many crypto traders and investors. As a result, this explains its stock’s year till date increase of more than 80%.

In addition to that, MicroStrategy announced that it purchased 328 Bitcoins in cash for around $15 million. Overall, the company has approximately 90859 Bitcoins which totals its Bitcoin holdings over $4 million.

Therefore, it is not surprising that most crypto investors are interested in investing in MicroStrategy stock.

Furthermore, in February, the firm presented nine hundred million convertible notes, along with around $1 billion following the green shoe option. Its objective is for the company to purchase additional Bitcoin.

So, in case MicroStrategy uses $1 billion to buy the coin at $53000 for each, the BTC in total will be around 18865. This will increase its Bitcoin holdings to approximately 89650 BTC. The value will be over $4 billion at $53000, meaning Bitcoin will be representing more than half of the firm’s market worth.

More so, the MicroStrategy firm is beneficial and is said to gain more than $6 on every share in 2021. Nevertheless, the price stands for 169 times gains.

However, after the deduction of the value of Bitcoin from its market capital, the company is worth only around $4.4 billion. So, if the $65 million estimations in this year’s net income take place, its original P/E ratio is 69 times only.

This is relatively high yet practical for an expanding software firm. In the meantime, investors gain free exposure to cryptocurrency by purchasing MicroStrategy stock.

Coinbase Global Inc.

Located in San Francisco, Coinbase Global Inc. is a well-known firm that offers services in order to support the trading of cryptocurrencies worldwide. It is a famous platform where crypto investors and traders can purchase, sell, transfer and store digital crypto assets.

Coinbase Global offers services to organizations as well as individuals to acquire digital currencies in over 30 countries globally.

At present, the company provides three essential crypto services that include Bitcoin, Litecoin, and Ethereum. It lets users make trading of over 50 alternative coins. Soon, it looks forward to including various other cryptocurrencies on the platform.

Till now, the company’s accomplishment has been dependent on the rise in cryptocurrency prices. As a consequence, many new users have created accounts on its platform.

Furthermore, Coinbase Global gains small transaction fees for every order placed to trade a cryptocurrency. However, the firm aims to be not just a trading place but something more than that. It also finances debit cards to let users spend from their digital wallet’s balance.

Adding to that, the company started a cloud channel for organizations to use and store their digital currencies.

Coinbase Global provides two ground-breaking changes:

  • To bring the tradition of asset loans to the majority, previously accessible to wealthy investors and traders only. Users can give collateral in the form of Bitcoin or other cryptos on the company platform. This, in turn, will get them a loan with low interest to finish off their daily expenses.

Thus, investors do not have to trade their assets during emergencies. It allows the principal to keep on compounding while dealing with issues.

  • For governments as well as financial organizations to adopt its blockchain analytics. The majority of blockchains work on a ledger publicly. Therefore, the firm can use this information and keep an eye out for illegal conduct and forbidden wallet addresses.

For instance, say a hacker was able to hack into a system and demanded Bitcoin as a ransom for unlocking the computer.

In cases like this, Coinbase Global can match the wallet address of the hacker with the various KYC information saved on its platform. This data will assist the police force in tracking down the finance flows and apprehending the hacker.

NVIDIA and AMD

NVIDIA and AMD are chipmakers that do not manage cryptocurrencies directly. Instead, these semi-conductor firms are the top-rated graphic processing units (GPUs) designers.

The companies are famous for generating premium video game graphics. Also, the GPUs can now set up comprehensive computing programs such as crypto assets mining, artificial intelligence, and data centres.

Cryptography, as well as the creation of blockchain, needs extensive computing power. So, keeping that in mind, GPUs are the ideal choice for the task.

In the year 2008, the two semi-conductors stock prices increased as a result of the profitable cryptocurrency prices. This is because the currency miners hurried to buy GPUs for the job.

GPUs are a basic hardware part of the formation and administration of cryptocurrencies. What’s more, NVIDIA has set up new chips line-up, particularly for digital mining, in the year 2021.

Furthermore, NVIDIA, as well as AMD, declared acquisitions recently, cementing their spots as frontrunners in the chip industry.

NVIDIA aims at purchasing ARM Holdings, a chip building design licensor for smartphones, data centres, etc. AMD, on the other hand, plans to obtain program-controlled chip innovator Xilinx.

Overall, both the semi-conductor firms are confident of keeping on getting a hold of the market share in the industry. They will continue leading the path to develop more technologies that emerge like blockchain.

CME Group

Located in Chicago, the CME Group is a frontrunner of the derivative marketplace all around the world. It consists of four tradings, i.e., CME, COMEX, CBOT and NYMEX.

Every trade offers various comprehensive benchmarks throughout significant asset categories, including set income, alternative cryptocurrencies, equities, etc. Thus, the currency asset is what makes this particular firm a cryptocurrency stock.

In 2017, CME Group set up the initial market for the Bitcoin futures. Furthermore, at the beginning of 2020, it built a market for alternatives on the coin futures. This year, you will also find Ether futures available for trading.

In July, CME Group reported second financial quarter figures, and the profits came in at over $1 billion flat year-over-year. The company’s adjusted net earnings rose to more than $585 million. Also, its adjusted income for every share of $1.64 was flat year-over-year in comparison with $1.63 in the previous year’s quarter.

The company’s second-quarter income was more than what the market expected, which was induced by low expenses. Aside from that, there was also a rise in micro futures as well as hedging, which seem to have drawn retail interest.

Both agricultural and interest-rate futures exchange volume increased by almost 25% year-over-year.

Recently, the company has implemented micro futures, which are a fragment of the standard agreement size, targeting the smaller investors and traders. For instance, the contracts of micro WTI crude oil are 1/10 as large as the standard contract of WTI futures. That said, CME Group’s micro-Bitcoin futures of over 100000 were exchanged in just 6 days of launching the contract.

Setting up derivatives trades for prominent cryptocurrencies has provided cryptos such as Ethereum and Bitcoin additional authority. Not only that, it has offered a means to digital currency users to reduce risk from cryptocurrency price changes.

With that said, CME Group has yet to go big when it comes to cryptocurrency derivatives. However, the company is most likely to include additional crypto asset trades in the long run.

International Business Machines Corporation (IBM)

Last but certainly not least, we have the well-known International Business Machines (IBM.) This corporation takes a spot on our list because of its connection with independent blockchain technology.

This tech giant provides firm-level solutions via two chief parts, i.e., Global Business Services and Cloud & Cognitive Software. The company’s products and services include automation, security, data, artificial intelligence, blockchain, and so on.

IBM declared its second-quarter income in the middle of July. Its total profit raised 3% year-over-year to approximately $18 billion. Furthermore, its net earning was around $2 billion, with an increase of 8% year-over-year.

Income for every diluted share rose 7% year-over-year to over $2 billion. In the second quarter, the firm created a free flow of cash of around $1.5 billion.

The company is extending supplementary businesses with the aim to concentrate its efforts on fast-growing cloud-specific operations. Its cloud sale in total increased 13% year-over-year to approximately $25 billion, then an increase of 20% in cloud-based supplier Red Hat.

Therefore, over a $30 billion investment in Red Hat provides the company with various cross-selling chances with its consumers.

Additionally, Kyndryl, the divestment of IBM’s controlled infrastructure organization, is most likely to be completed at the end of the year 2021. Once done, the management is expected to prioritize the company cloud and eventually gain more substantial growth and income.

Recently, IBM declared its deal of licensing its software to METACO, located in Switzerland. This deal will provide cryptocurrency custody services to finance companies. There will be a rise in the demand for these services in the long run, similar to the gold services provided globally.

Artificial intelligence technologies and IMB cloud will also take a significant part in blockchain and cryptocurrency services in the following years to come.

Top Three Real Estate Companies To Invest In The UK

Dividend, Stock Market

Top Three UK Property Developers To Invest In

Investing in real estate is profitable if you get a headstart in the right direction. However, The upfront costs of becoming a private landlord or a property developer along with the stress and risks involved make the prospect of buying shares in the professionals much more appealing, But the trick is to find the right company! You can do so by researching and evaluating the track record of companies before investing. 

Financial details about a company, such as dividend payouts, market cap, and gross profit, can tell a lot about its performance, and it is always wise to know these details. 

So which are the best property developers to invest in the UK? How to measure a company’s performance? Are companies that produce building materials ideal for investment?

If you have these questions in your mind, you have landed on the right page. We have done hours of research to bring you three of the best businesses that provide you with the best returns. 

Without further ado, let’s get started.

How to measure a company’s performance?

Measuring a company’s financial performance is crucial before investing. These details help you evaluate various aspects of a company and how you can benefit from it.

Here are some of the crucial factors that you need to evaluate before investing:

Company’s Liquidity

A company’s liquidity is one of the crucial financial metrics you need to consider before investing. Financial statements, such as income statements, cash flow, and balance sheets, can help you learn more about the company’s performance over the years.

One of the best ways is to analyze the balance sheet’s liquidity in cash form. In other words, a company must have enough money to support or cover its expenses. Additionally, checking out the current ratio can reveal a company’s financial position.

Income Statement

After determining liquidity, your next step should be to evaluate a company’s income statement, including financial metrics, such as net income growth and earnings growth.

These metrics can help you understand the financial condition of a company and simplify your investment decision. For instance, evaluating the growth lines and checking whether the lines are parallel can help you decide better. 

Examine Returns

Another way of finding out the financial position of a company is by checking its Examine Returns, such as Return on equity, Return on Assets, and Return on capital. If a company has strong returns, it is undoubtedly worth a shot!

Generally, a company with a 30% annual return is the one you should consider. Additionally, you can check how a company is using its assets to generate revenue before investing.

Operating Cash Flow

Operating cash flow is another crucial factor you need to consider before making an investment. You can check the operating cash flow by evaluating the cash flow statement and determining whether the company generates real cash. 

For instance, it would be wise to invest in a company wherein cash flow increases even after making capital expenses. However, if the company makes money by selling business assets and stocks, it is better to avoid it.

Now that you know what to consider before investing, here are the top three companies worth investing in the UK.

1. Taylor Wimpey

If you want to invest in a business that excels in building houses, Taylor Wimpey can be your ideal pick! Did you know? It is one of the best companies with the highest market capitalization. No wonder why it has thousands of happy clients!  

They state they build more than 15,000 high-quality homes a year and in the first half of the year, they managed 7303.

Taylor Wimpey is one of the largest house-building companies in the UK. Formerly known as Taylor Woodrow plc, the company merged with its fellow rival George Wimpey in 2007. Besides, you can find this company on the FTSE 100 Index of the London Stock Exchange. 

The company has an excellent track record of providing quality houses to its clients. Additionally, their market evaluation has been a profitable prospect for investors looking for a different approach to investing in real estate in the UK.

Market cap

As per the latest standings, Taylor Wimpey’s market cap stands at 165.50 GBX. The company has been maintaining a consistent run on the stock ratings, which is why they are considered one of the best businesses for investment. 

Dividend payout

Taylor Wimpey follows an excellent strategy to manage the market cycle. This strategy helps the company to balance its capital requirements while returning maximum capital to its shareholders. Additionally, they maintain their balance sheet flexibility and strength without altering the capital structure.

According to the latest reports, Taylor Wimpey paid 4.14 pence a share dividend representing a 2.67% yield, making them a lucrative option for aspiring stock and share investors. These metrics also make them a reliable business that can offer profitable returns without taking excessive risks.

Plus, you can opt for a bank transfer or deposit in your building society account to receive your dividend payments. 

Gross profit

The housing demand in the UK has seen a new surge, and companies like Taylor Wimpey consider this opportunity to maintain their position as Britain’s third-largest house-building company. 

According to reports, the company forecasts an operating profit of $1.14 billion or 820 million pounds in 2021, surpassing their top-end range of 756 – 808 million pounds. 

Growth

After Covid-19 halted the works and earnings of Taylor Wimpey, the company overcame the hurdles of 2020 by achieving a new feat. According to reports, the company constructed 7,300 homes in the first half of 2021 and planned to expand this tally to 14,000. 

The target of building 14,000 houses in 2021 would propel their operating profit to about 820 million pounds, which is a significant leap forward compared to last year. 

Taylor Wimpey delivers high-quality homes and ensures long-term sustainability, making it a profitable investment option for many. And we can’t think of any reason why this company shouldn’t be on your list!

2. Barratt Developments

Barrat Developments has been a consistent name featuring in the London Stock Exchange’s FTSE 100 Index because of its high market capitalization. It is another renowned house-building company in the UK and operates across Wales, England, and Scotland.

The company started its journey as Greensitt Bros in 1958 but acquired its present credentials after Sir Lawrie Barratt assumed the company control. Besides getting a new name, the company shifted its office from Newcastle to Coalville in Leicestershire.

The company is a lucrative option for investors in stocks or shares with high returns. 

Market cap

The latest market cap of Barratt Developments stands at 682.19 GBX. The company has been a favourite of investors as it maintains a consistent run on the stock ratings. 

Dividend payout

After Covid 19 played havoc in 2020, Barratt Developments churned out a new dividend policy, ensuring a 7.5 pence share dividend representing a 4.45% yield. The policy came into effect in February 2021, with final payments slated to be released in November 2021. 

You can also opt for their Dividend Re-Investment Plan that allows you to purchase additional Barratt shares with your dividend payouts. 

Gross profit

Barratt Developments have seen an upward trend over the years. Their revenue grew from 3.42bn to 4.81bn. The figures improved the company’s net income by 65.07%, from 399.70 million to 659.80 million. That’s impressive! 

Growth

After suffering a significant setback in 2020 due to Covid-19, Barratt Developments experienced a successful run in 2021. Their growth report indicates an increase of 64.66% in earnings per share. This percentage can become a deciding factor for aspiring investors looking for an alternative way to invest in real estate.

According to reports, Barratt Developments expects to complete more than 16,250 homes in 2021. 

3. Persimmon plc

Persimmon plc is a leading house-building company that can act as a safe refuge for aspiring investors. The company is an integral part of the London Stock Exchange’s FTSE 100 Index and is one of the largest house-building companies with excellent market capitalization.

Duncan Davidson founded the company in 1972 and named it after the horse that won the 1896 St. Leger and Derby. The company began its operations regionally but soon earned a global reputation because of its high-quality projects.

By the end of 2001, Persimmon started delivering 12,000 houses per year, which is an incredible feat to achieve. 

Market cap

Persimmon is a consistent name in the stock exchange. As per the latest records, the company had a market cap of 2,747.00 GBX with fewer dips in the past months. It is undoubtedly one of the best businesses to invest in to reap higher returns.

Dividend payout

According to reports, Persimmon pays two dividends each year. However, they may run special dividend schemes from time to time (based on special requirements). 

The company has a consistent dividend payout policy, which allows its beneficiaries to reap returns two times each year. Despite facing a steep challenge last year due to the Covid-19 crisis, the company plans to increase its dividend payout, which is good news for investors.

Gross profit

As per the company’s performance report, Persimmon generated housing revenue of 1.75 billion pounds in the first half of 2021, which is a significant jump from 1.10 billion pounds during the same period last year. 

The figures translate into higher profit numbers with 480.1 million pounds compared to 292.4 million pounds last year. Persimmon has been delivering robust financial performance and is growing as a profitable investment option for aspiring investors.

Growth

Apart from returning magic profit figures, the company has been growing in its business and customer satisfaction. Their promise to deliver high-quality houses has put them on the map, and many customers prefer to own a Persimmon house today.

According to the latest reports, Persimmon completed 7,406 houses in the first half of 2021 compared to 4,900 homes in 2020. 

Creating sustainable value, strong trading performance, and a positive outlook are a few factors that make Persimmon a profitable option for investors. 

Other investment alternatives

Apart from investing in large house-building companies, businesses that manufacture building materials and bricks can become an excellent alternative for investors. 

Since building materials are essential to building houses, you can get high returns by investing in their stocks. However, with a sea of businesses claiming to be the best, it can get pretty overwhelming to decide on one! 

After weeks of scouring the real estate market and research, we landed on Ibstock as the best alternative investment. Why? To begin with, they offer higher returns than their competitors.

Ibstock

Ibstock is one of the leading suppliers of brick products in the UK. The company has a long history of producing high-quality building materials that date back to the early 1800s. 

Their products include:

  • Clay bricks

  • Concrete roof tiles

  • Concrete fencing

  • Brick components

  • Pre-stressed concrete products

  • Concrete rail products

The company’s strategy to deliver value to its customers has driven its performance in recent years. This excellent market performance makes them one of the most profitable companies for investors. They also have signed lucrative contracts with the British government to supply goods for infrastructure upgrades planned over the next few years. With Brexit and supply chain issues becoming more of an issue a UK based company of this size is in a great position to propel itself into a profitable future.

Market cap

According to the latest standings, the market cap of Ibstock plc stands at 217.00 GBX with fewer dips. Its consistent run on the exchange can provide profitable returns for investors.

Dividend payout

Ibstock plc pays two dividends per year with an approximate dividend cover of 2.2 pence. The payout may differ if the company rolls out special schemes as per their requirements. 

According to reports, the last dividend paid by the company was 2.5 pence per share, which is an ideal amount for those looking for an alternate trading option. 

Gross profit

The company increased its total revenue by 54% to 202 million pounds by June 2021. The gross profit for the company stood at 72 million pounds with 40.81 million pounds as operating income and 10.97 million pounds as their net income. 

Considering that the company achieved a 54% jump compared to their last revenue, this may be a great time to invest some money!

Growth

Although Ibstock plc is not a widely-known stock, Perhaps due to the company’s nature as a raw materials manufacturer which isn’t as exciting as the popular out fancy tech companies, its recent performance in the London Stock Exchange has turned many heads in the industry. Its compelling stock price looks like a lucrative option for many investors!

Conclusion

Investing in any company can be tricky, especially if you are a beginner. However, with little effort and a detailed evaluation of the market, you can find yourself a profitable deal in any market space. The property market in the UK is experiencing rapid growth and with a variety of investment options for everyone, it can be a difficult task to narrow it down. By investing in home builders you get exposure to the booming housing market but get some insulation from the volatility as new homes are still needed across the country. If the housing market did experience a dip the profit the property developers make can absorb some of the blow. The one major concern would be problems with raw materials which we could experience with supply chain issues due to Brexit and covid. 

It would be best to research, compare, and evaluate the companies before investing, but as the saying goes during a gold rush sell shovels and I feel in a way home builders take that role in the housing market.

FreeTrade Review – The best stock trading and investment app?

Dividend, Stock Market

FreeTrade Review – The best Commission-free stock trading and investment app

Freetrade is an online trading service that started in the UK in 2016. It provides commission-free trading in stocks and is safe as it is regulated by the top tier regulator FCA. But should you choose this service over the others when others have been into business for so long? How does it compare with other services? Here is a detailed overview of Freetrade so you can have a better idea of why and when you should use it.

What is Freetrade?

Free trade was founded in 2016 by Dodds and Davide Fioranelli for the sole purpose of making stock trading easy and at the same time taking ownership of stocks affordable. They used to work in KPMG, a corporate finance firm from which they gained experience.

There isn’t much going on with the service as of yet as you don’t get all those extra features like precise calculations and speculations as offered by other services like Trade212 and Lansdown. However, they are implementing more analytic data such as Dividend yields, market caps. P/E ratio.  But what this service is known for is its low-cost trading account. The USP is that it allows you to trade with real shares with no commissions or any kind of fees. This helps those people who build a portfolio who find investing a large sum of money as a risk. Because you can start trading with only one pound, it is considered risk free.

You only need a Smartphone app to get started and the best thing is that you can even hold your shares in the ISA to keep yourself tax-free, Currently, they have a user base of 250000 and increasing.

How does it work?

In case you are using your trading platform, it can be expensive. The traditional platforms like Landsdoen and Its investors focus more on funds thereby increasing the cost of maintaining and trading stocks. But if you look at Freetrade, it is solely share based. It is extremely convenient to build a portfolio with just one pound of investment.

With free trade, you can invest by purchasing shares of companies in the UK as well as the US. It also has the option for exchange-traded funds. For a basic trading account, you only have to pay the basic stamp duty. If you want to hold your shares in the ISA, it will cost you three pounds a month. For depositing money, you can either set up a bank transfer or you can use your credit card to make direct payments.

It is recommended to use google pay as it will be instantly transferred. For bank transfer, you may have to wait for a while. For withdrawals, you can always transfer your funds to the same account you used with Freetrade and your funds will be transferred within 5 working days. If you urgently need to withdraw, you can pay an additional five-pound and withdraw instantly. Do remember that you will have to request before 5 pm and for solid investments, you will have to wait until the settlement of the case.

How to set up a Freetrade account

Opening an account with Freetrade is fairly simple. It has a detailed website that has all the information you are going to need to register your account. But you cannot register on their website. The only way to register is through your Smartphone. You can easily download the app from the Android play store or App store for apple. Registering your account and setting it up only takes minutes. This shows the developer’s intentions. This platform is only intended for those people who want to manage their money through their app. Just start by registering through your email and you will be sent a verification code to activate your account.

The next step would be to enter your personal details like your address, name, DOB, Insurance number, etc. You can link your bank account to transfer funds and also have the option to use Google pay or Apple pay. This app also allows you to search for ETDs and stocks and you can also see the variation in prices based on their weekly, daily or monthly report. When you invest your money, you can monitor your portfolio to see how it is performing and easily buy and sell stocks. The interface is simple and intuitive and can be deemed to be user friendly. It is also very informative as it shows what the share price is and how much stock you receive based on your investment.

Freetrade features

  • Freetrade offers commission-free trading which means it is easy to go from one to ten and ten to a hundred pounds in no time. Freetrade won’t charge you anything for shares. This is a DIY investment that returns to you fully.

  • The best thing about free trade is that it allows you to start with just one pound with minimal risk.

  • Allows you to invest in major companies like Google, Facebook, and other giants.

  • You can have dividends and interests free of tax by holding your funds in the ISA. Even if you have a previously existing ISA account, you can still transfer that ISA money to your current account.

  • The free share feature allows you to have shares in the company worth three to over three hundred pounds if you refer a friend on the Freetrade platform. This is a way to have more users for this platform and for retaining them. This also allows users more opportunities to go for high flying stocks.

  • Some companies provide perks to their shareholders. You can expect to get some discounts on their product if you can earn a specific amount. This is a nice way to save.

  • The basic account that you get with free trade is free and it allows you to sell or keep shares. If you want a service from which you can get tax free dividends, then Freetrade is the best choice.

  • Comes with Free trade plus service. This is a subscription that allows you to have access to more high flying stocks. It also comes with additional beneficial features. For example, it has priority alerts and stop-loss features which prevents you from losing more money than you earn.

How does Freetrade make money?

One must ask if it is all for free, how does Freetrade itself make money. For sure it is not a charity. The basic service is free but they earn their part from their monthly fees from optional subscriptions such as:

  • Freetrade ISA, £3/month

  • Freetrade Plus, £9.99/month

  • A fee of 0.45% of the Base FX rate on each US order placed  (The standard FX rate is 1.50%)

  • A small amount of interest earned from banks on customers’ cash

As a rough comparison, other brokerages can charge a 1% annual management fee for an ISA account. 

Freetrade is current £36 a year 

A portfolio of £5000 with another brokerage could be £50 (this is only going to get more expensive as your portfolio grows eroding your tax free gains)

Freetrade commission

Freetrade is quickly becoming one of the UK’s best online apps for trading. The app is hassle-free and simple to use. It’s great for the youngsters and the masses as well. One thing that sets this app apart from any other trading platform is that it is commission-free. No commission is charged while buying or selling shares from Freetrade.

In addition, it offers over 1000 stocks and ETFs (Exchange Traded Fund) free of commission. ETF comprises securities that are traded like stock exchanges. It’s similar to mutual funds. However, ETFs are sold and bought from other owners during stock exchanges all through the day. But with mutual funds, the trade starts after the market is closed.

Through Freetrade, you can buy shares and sell them with a profit. The app’s popularity is growing at a fast phase, especially with the influx of retail investors. If you are new to stocks and investment, this app would be great for you. Furthermore, the app is mainly built keeping the youngsters in mind.

Unlike other trading platforms, accessibility is hassle-free and straightforward. Anyone can use it without any issue. Note that this app does not offer advice on financial services. So, with freedom comes the responsibility to invest in the right stock.

Freetrades broker

Freetrade is a trading app that runs solely on a mobile phone. It allows easy access to any user, making it a user-friendly app for trading. The app currently doesn’t work on the web platform, but the company is working on it. So, in the coming years, you might be able to access it through the desktop.

There are various aspects to consider while looking for a good broker service. First, it should be user-friendly along with easy accessibility. In addition, it should have good customer service and low fees. It should also have a low minimum deposit.

Also, opening a new account process should be simple. Furthermore, one of the most important aspects is safety. You should see how secure your account is and if the authorities regulate it.

With that said, Freetrade broker is an excellent app for the beginner. It’s a mobile-based trading app that offers ease of use. It’s a simple two-step login process and has a good function for searches. The account opening process is fast and fully digital. As a broker service, Freetrade offers a multitude of features along with safety.

Freetrade is regulated by UK’s FCA (Financial Conduct Authority). It is an investor protection scheme that offers protection if a broker becomes inoperative. In addition, the customers under Freetrade are protected by the FSCS (Financial Services Compensation Scheme).

The scheme provides a protection amount with a limit of £85,000. Freetrade is a trusted broker that ticks all the excellent prospects of being a trusted trading platform.

Freetrade fee

Freetrade is free of charge when it comes to trading stocks and ETFs. In addition, it also doesn’t have withdrawal fees. Initially, it only had free charges for basic orders. However, starting from February 2020, it cancelled commission on instant orders too. Basic orders are available only after the market is closed. With instant order, you can place it when the market is up for operation.

Furthermore, it offers the lowest fees for trading in ETFs and stocks in the US and UK. Also, it has low costs for non-trading as well. Freetrade doesn’t charge inactivity fees. There is also a no-account fee for a basic account. However, if you choose Freetrade Plus, you will have to pay a monthly fee of £9.99. But with this account, you get more stocks options, priority customer service and limited options.

Overall, Freetrade offers a good bargain. It doesn’t have a withdrawal fee but is chargeable if you withdraw on the same day. It will cost you around £5. The charges might be higher as compared to some rival companies. However, one cannot deny the fact it also offers exciting features.

Freetrade referral

Freetrade comes with a multitude of features where some might help you to make money. For instance, you could earn a free share worth up to £200 if you signed up to Freetrade through a referral link. In addition, the person who referred you also will get some of the free shares.

Furthermore, you don’t have to be a YouTuber or an influencer to be able to refer friends to Freetrade. The feature is available for anybody that signs up for this app. In addition, it is also currently unlimited. You share the referral link with as many friends as you want.

And to do this, the process is simple and easy. First, you need to go to the home page of the app. There you will see the overall portfolio. Next to the portfolio, you will see a free share button at the top right corner. You can click the free share button and then click on the send free share button. With that, you will get multiple ways to share the link.

In addition, you should be able to activate the free share. The person that you have referred should sign up with at least £1 to activate the reward. It’s a great prospect to make money and without any limits. Some people might find it sceptical, but it’s an excellent way to earn money or shares through referrals.

Along with the low cost and free commission, Freetrade offers you an easy way to earn money. You can send the referral link to your friends or relatives, where both parties will equally get free shares. For beginners, this would be an excellent way to start your investment journey. Through a referral, you can begin earning shares and sell them when the price is higher. It can be a slow process, but it will all be worth it eventually.

Furthermore, with Freetrade, you don’t have to worry about fees. It’s low both for trading and non-trading. In addition, it’s a trustworthy investment platform that is regulated by high-tier authorities.

Freetrade minimum deposit

Freetrade comes with no real minimum deposit as the actual limit is £1. Along with free withdrawal, you can open an account without having to pay any amount. Any traders would find this feature interesting and profitable too. In addition, you also don’t have to worry about account creating process. It’s fast and fully digital! Also, one of the significant aspects of this app is that it is user-friendly.

Anyone can create an account without any hassle. You can deposit without having to pay any fees. Furthermore, you can deposit or withdraw through Google pay, Apple pay or bank transfer.

For withdrawal, Freetrade doesn’t charge fees for the non-same day withdrawal option. However, if you choose same-day withdrawal, you will have to pay a fee of £5.

Furthermore, you cannot withdraw through a debit card. It is only possible through electronic wallets and bank transfers. Unlike other brokers, it gives you the option to withdraw through electronic wallets. Also, it will take two days to withdraw through bank transfer.

Also, withdrawing money from Freetrade is an easy process. You need to log in to the trading app and go to the account tab. With that, click withdraw and type the amount you wish, and then you can proceed with the withdrawal.

It also offers you the option to open four different types of accounts:

  • General investment account (GIA): This account is mainly for ETF and stock trading. There is no monthly fee, and the order types can be both basic and instant.

  • Investment saving account (ISA): It’s a saving account with tax efficiency. You can trade both ETF and stock along with fractional shares. However, you have to pay a monthly fee of £3, and the order type is only basic.

  • Freetrade Plus account: It is a new account, and under this, it offers different product portfolios and types of orders. However, it comes with a cost. You will have to pay £9.99 per month. But on the good side, you can trade both GIA and fractional shares. It is also tax efficient like ISA.

  • SIPP (Self-invested Personal Pension) account: It is an excellent retirement saving account for pension savings. SIPP comes with a monthly fee that will cost £9.99 per month. Also, the product its offers are both GIA and fractional shares.

You can choose any account that suits your requirements. The step to creating the account is easy and will take only ten to fifteen minutes. However, you should note that it doesn’t accept credit cards. It only accepts debit cards for deposits.

Also, Freetrade only has a single base currency. It is only through GBP (Great British Pound). Unlike other brokers, it trades only through a single currency. So, if you have a bank account with a different currency, there will be a conversion fee.

But there is a way to avoid the conversion fees. You can open a multi-currency bank account through a digital bank. Digital banks offer accounts with different currencies along with reasonable exchange rates. In addition, you also get free or low-cost bank transfers for international transactions.

Is Freetrade safe?

If you are worried about the safety of your money then stop. This service is regulated by one of the top tier regulators. There is no question of your money going anywhere except trade.

The financial conduct authority (FCA) makes sure that each customer is treated fairly. If you have complaints, you have the option to complain to the platform as well as the financial ombudsman service in case your issue is not resolved.

It also acts as principal secured financing because your assets are protected up to the value of 85000 pounds by the U.K. financial compensation scheme (FSCS) in case the platform becomes insolvent/bankrupt like all major banks.

Other losses that occur through unsound decisions are not covered i.e. you keep buying high and selling low.

There is a segregation of funds ensuring that freetrade cant use its client’s funds to pay creditors.

UK-listed stocks or ETF’s are held in CREST which is the UK’s central security depository which again prevents creditors from accessing your assets to cover freetrades debts.

US-listed stocks are held by a third party security and exchange commission(SEC)-registered broker under the depository trust & clearing company (DTCC) again keeping your assets separate and secure.

 

Pros

  • The Freetrade platform is very easy to set up where you can very easily invest your money securely in the stock market within a matter of seconds because of the fast and simple process.

  • The user interface is very user-friendly and the app is designed to be very simple.

    FreetradeIPOS

  • The app is very well organized and is arranged in easy to use five sections which include your insights, portfolio, information on stocks and ETFs, and where your money is going.

  • Unlike other traditional stock trading, this does not cost you anything. Furthermore, it doesn’t have any commission, so you can increase your profits fast.

  • A growing list of international stock options as well as IPO’s.

  • It allows you to hold your shares in the ISA where you can be free of all taxes.

  • It has a huge community where users can learn from the experiences of other traders.

Cons

  • The biggest risk of trading with this platform is that it is easy to lose a lot of money without even knowing.

  • There is not any kind of detailed information or warnings regarding stocks.

  • Part of this has to do with the easy to use interface. It is very easy to buy and sell shares with this platform that it almost becomes like an addictive game.

  • While the figures are decreasing, one doesn’t realize how much money he is losing.

  • There is no trading limit to stop overspending like on most gambling websites.

  • There is little to no research tools available for the user to analyze his place in the market and the condition of the stocks.

  • There is nothing to tell neither you about how the stocks are progressing nor any news page where you can have an update about the companies.

  • It is all share-based and there are no funds. Funds can diversify shares but in Freetrade you are only limited to stocks.

  • Freetrade only has companies enlisted in the UK and US which means that you are left out of all other companies from Europe.

Free trade is essentially ETF and stock trading. While it is easy to maintain and open an account and trading seems effortless, it doesn’t have any protection from over-trading neither it provides many tools to analyze the stocks. Furthermore, cards are available only for deposits and not withdrawals.

Free trade ISA

When you are investing, there is always more risk of loss than profit. Couple that with tax laws and commissions, brokerage fees and you are left with pretty much nothing. Freetrade has a three-pound monthly fee for holding your shares in the ISA. ISA rules have different tax rules and this can save you from taxes.

  • Tax-efficient

With the ISA there is no income tax or capital gains on your investments and return therefore you are always tax-free

  • Limit

You can deposit up to £20000 pounds per year for a three-pound monthly fee.

  • Long-term investments

While holding your investments in the ISA, you can secure your dividends and capital gains by making them tax-free. This allows your wealth to increase much faster. Furthermore, your investments are secured for the long term.

Why should you open an ISA with Freetrade?

  • Commission-free

When you open ISA with Freetrade, there are no commissions whatsoever for buying and selling the stocks. This essentially means that your investments can grow manifolds in no time.

  • Allows instant trading

Freetrade allows unlimited instant trades for free during the stock market hours.

  • Safe and secure

As Freetrade is one of the few services regulated by the top tier regulator FCA, your investments are secured and safe. Furthermore, you are also covered by the Financial Compensation Scheme as well.

  • Low fees

Freetrade doesn’t have hidden charges or vague fee structures. It charges three pounds flat every month for holding your investments in the ISA. This way you can grow your investments without having to worry about the increased fees.

  • High-quality stocks

Freetrade allows you to choose from several high-flying stocks like that of Google, Apple, and many others.

  • Fractional shares

Here is something that separates this service from others. Even if you have to buy the most expensive share, you can have a chunk of it for yourself for as low as two pounds. This is very good if you are looking to make a more diverse portfolio for yourself.

  • Support

Freetrade has amazing support with fast resolution times. They are there for you when you need them. For ISA they have extended support as well.

 

 

Freetrade vs Trading 212

freetrade v trading212

Both services have a lot to offer. Both allow you to trade stocks for free without even having to pay any commission fees. Other companies like eToro are also following suit. Freetrade allows you to trade in stocks and ETFs while Trade212 allows you to trade in instruments. You can trade over 1800 of them. Instruments such as commodities like oil and gold, stocks, currencies, and cryptocurrencies are some things that you can expect to trade-in. In this manner, Trade 212 has a broader scope. Let us see how these two free trading services compare with each other.

Both the Freetrade and Trade212 are the same in terms of Stocks and shares, ISA, Fractional shares, and Ethical investing practices. Neither of the two services provides anything for Pension (SIPP) or Lifetime ISA (LISA). Both platforms have apps for Desktop, Android, and iOS platforms. Trade212 has a lot of Guides and other information on the available products while Freetrade provides nothing like that. It has limited research tools as well unlike Traded212 which allows you an in-depth analysis. Trade212 offers demo accounts and has a good number of videos and walkthroughs while Freetrade doesn’t have any of those.

Costs

While both of the platforms are absolutely free and they charge you almost nothing, there are but few differences between the two when it comes to actual costs. Trade212 does not charge anything except for the 0.5 per cent foreign exchange fee. There are also some incumbrances on the deposit amount and withdrawals as well.

Compared to this Freetrade also has some charges. For example, it charges 0.45 per cent for foreign exchange if you are buying shares from another country. There are also a couple of charges to use their stocks. As for withdrawal, there is no fee but if you want the same day withdrawal, you will have to pay as much as five pounds. These fees are still peanuts if compared to other trading platforms. On other platforms, you can easily incur charges as much as ten pounds that decreases your returns. This ensures a good deal of incurring a lot of profits without having to spend money.

Demo account

Freetrade does not offer Demo accounts. This means that you have to go straight into trading without practising. Trading212 however, has Demo accounts and you can practice as much as you want before going into the real thing. Once you feel that you are ready to trade, you can try this for real. The good thing is that it lets you practice on a Demo account without having to register through an Email. But if you want to have an insight into your stocks then you will have to sign up for them.

Is Freetrade better than Trading 212?

Both services are amazing choices for free trading. Freetrade is simple to use and aims at new users. Trade212 has a lot of options and is a comparatively well-made platform for more advanced users. That is why it gives you a demo account to practice first. Neither of these two will give you a pre-made portfolio and you will have to make your own. If you want pre-made portfolios then these services might not be for you. We think that both Trading 212 and Freetrade have their own pros and cons making them suitable for a variety of users.

Freetrade vs Lansdown

  • Interface

Both the platforms have an easy to use interface and allow for fast trading options.

  • Stocks

They have free stocks and provide the option for ETF trading as well.

  • App

Both platforms have mobile and desktop apps for easy usage.

  • Learning tools

Both platforms have intuitive learning tools that educate the user of the trading principles and best practices.

  • Customer service

Both platforms have great customer service who are always there to help you.

  • Investor protection

Both the platforms offer a high level of investor protection

  • Clients

The majority of the clients on both platforms are from the top tier authorities.

  • Stock exchange listing

Lansdown is listed on the stock exchange while Freetrade isn’t.

  • Negative balance protection

Freetrade does not have protection for the negative balance.

  • Banking license

Neither of the platforms holds a banking license.

Freetrade offers almost no tools to properly research the stocks and has a very limited Portfolio. Furthermore, the Debit card can only be used for deposits and not for withdrawals. On the other hand, Lansdown has a high fee for ETFs and stocks and if you are outside of the UK, you have to open an offline account. Furthermore, if you want to trade in any other currency, you cannot do it with Lansdown.

Bottom line

Freetrade is a comparatively new company in its initial stages. Established in 2016 it has grown massively and has a good track record as a broker. It even survived the financial crises and has sustained its existence. Freetrade is regulated by top tier regulators and is, therefore, a safe platform to trade on. Furthermore, the PEC also does an annual audit of the company that provides a high degree of investor protection.

Free trade allows trading in stocks and ETFs with a great fee structure. Starting with almost nothing you can build a considerably vibrant portfolio because you get to purchase a part of the most expensive stocks for just two pounds. The account opening is easy and pretty fast. The app is intuitive and easy to use while the whole thing is very user-friendly.

Although it has some drawbacks like the inability to go beyond the US and UK stocks and the limitation imposed on credit cards plus the severe lack of research tools. But it is a great choice for people if you want an easy-to-use trading system with instant trades and execution on a very low fee. If you are looking for tax-free investments and want to hold them in the ISA then Freetrade is a great choice indeed.

 

Freetrade offer a free share for new accounts
Freetrade offer a free share for new accounts