Investing in Stocks vs CFD in safe Mode

Question

I made a few thousands dollars through a couple of freelancing projects (around $20k - $30k), i’m 32 with almost no responsibilities, have a full time job making decent money, and I live in Egypt with no other nationality or residency. I want to invest the money i have, in something with 20%-30% annual return on the medium term, for 2-4 years. Being in Egypt have a huge disadvantage, is we are having an inflation rate of 14% annually, so if i put my money in a bond with the local currency ( egyptian pound) and with around 15% as an interest rate, i would end up having the same value of money after the 12 months, which seems like a very bad investment, with pretty much no return on the ground.

Stocks/CFD seemed like a good option. CFDs website like eToro and social trading looks promising, i made my homework reading books on trading and following related forums. So i planned to put my money there and start investing with small risk, no crypto, no leverage, just stocks on FAAG and other diversified industries stocks. A couple of questions i have:

1. Do you guys think this is a good option for me to invest, considering my location and the amount of money i have, in eToro and CFD, considering i’m not using leverage and the spread fee for eToro are fine by me since they are okay if you are not using leverage.
2. How can i invest in actual stocks if i’m an Egyptian Citizen, do u have to be a US citizen for this to work, any suggestions for reliable online brokers to use in that case?
3. What would be the advantage of buying the actual stocks, i’m mostly investing in companies issuing no dividends, and i get the same profits with CFD like etoro, and i’m not using leverage.
4. eToro related question, i read a lot that i’m trading against the house, it’s eToro that gives me the profits, is it possible to make money having this on the table. Are there statistics on the percentage of winners in CFD ( i heard 73% lose money there, that’s a lot)

Thanks.

Answer 1

Nothing gives a reliable 20-30% annually, especially not stocks.

This is why people use margin, leverage, crypto and lose.

Try to enjoy yourself!

Answer 2

In the medium term, you should consider low risk investments. Stocks are too likely to fluctuate in value over the course of 2 to 4 years.

If your main goal is to get some return above your currency's inflation rate, consider finding a financial institution that offers accounts in USD or EUR with low risk savings options. If you get a 2% return on your USD or EUR investment, that would be similar to a 16% return in Egyptian pounds when factoring in your 14% inflation rate.

Answer 3

Assuming that your main activity is not investing in stocks but your freelancing projects, why not to invest on then?

You should invest in what you know best. The best way for your national currency value in a steady way is the diversification of the economy. If everybody invest in what they know best in general a specific business you can even expect returns higher that 30% in 4 years from now. At your age and with your steady income you can start participating in the making of rules and not just respecting them or worst playing without knowing them like you mention is the case of many people in finance.

For all that questions a good fiscal attorney or the attraction of investment of every country in the world can negotiate with you.But unless you really want to do this in full time I suggest making your business growth and more people will profit from it.

Answer 4

CFDs mostly exist due to having favourable tax treatment in certain countries and often lower margin requirements. Many CFD brokers like eToro internalize orders which means it's entirely up to them (not the market) what price they will give you.

Many brokers nowadays accept non-US customers, so residency or citizenship is often irrelevant.

I have to warn that eToro is a terrible platform for trading, use a proper broker like Interactive Brokers instead.