Spread betting: the trend really is your friend

What really matters to spread betters isn't the underlying fundamentals of an investment, it's which way the price of an asset is moving, and how quickly you get in on the trend.

Ever watched a football match where the best team hasn't won? Or a horse race where the favourite came last? The same can often happen in investing.

I could spend hours researching a stock, crunching ratios, scouring the accounts, watching the news flow. I then buy and wait in vain for what I think is a cheap stock to rise. It doesn't. Am I wrong about it being cheap? Maybe or maybe not. The key point is that unless I am a name like Warren Buffett, George Soros or Anthony Hilton I can be wrong even when I am right. In other words if the herd doesn't follow me into a stock, it won't go up no matter how right I think I am.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.