Once you\u2019ve chosen your investing platform you can start thinking about which fund, commodity or stock you want to buy.<\/p>
Here are the steps involved in setting up a share dealing account:<\/p>
- Pick a share dealing platform<\/a> and create an account.<\/li>
- Add money to your account using a bank transfer, debit or credit card.<\/li>
- Search out iron ore stocks or ETFs<\/a> on your platform, and then submit a buy order.<\/li><\/ul>
Strategy 1<\/span>
Invest in iron ore ETFs<\/h3>ETFs or exchange traded funds can help you to diversify your investment and spread your risk. There are two main types of metal ETF: some track an underlying precious metal index and invest in metal futures, and others invest in a wide range of metal mining companies. Here are some pros and cons of investing in iron ore through an ETF:<\/p>
\n\nPros<\/h4>\n
- \n
- ETFs are a low cost way to invest in commodities as they tend to have lower fund charges than other managed funds.<\/li>\n
- Your investment will be diversified across many different companies or across various metal futures.<\/li>\n <\/ul>\n <\/div>\n \n \n
Cons<\/h4>\n
- \n
- ETFs invest in many underlying stocks or metals so you lose some of the control over your investment.<\/li>\n
- You may not be able to invest in a purely iron ore ETF. For example, some metals ETFs track the S&P Custom Precious Metals and Mining Index which includes many different metals.<\/li>\n <\/ul>\n <\/div>\n <\/div>\n
Buy iron ore ETFs<\/a><\/p>
Strategy 2<\/span>
Invest in iron stocks<\/h3>Investing in iron-mining companies is one of the most simple ways to invest in iron ore.<\/p>
\n\nPros<\/h4>\n
- \n
- Low investing costs as you'll own the stocks directly<\/li>\n
- You can pick individual companies you like and have control over your investment.<\/li>\n
- You can select stocks that line-up with your investing goals or ethics eg. you may want to avoid companies that invest in Russia.<\/li>\n <\/ul>\n <\/div>\n \n \n
Cons<\/h4>\n
- \n
- Small iron-mining companies have a high risk of failure if the iron ore price collapses.<\/li>\n
- Investing in individual shares is less diversified than investing through an ETF.<\/li>\n <\/ul>\n <\/div>\n <\/div>\n
Buy iron stocks<\/a><\/p>
Strategy 3<\/span>
Invest in iron ore futures<\/h3>Investing in iron ore futures is complicated and risky. It means you\u2019re committing to buy iron ore in the future for a set price. If prices go up, then you\u2019re quids in, but if they go down you\u2019ll still be committed to buy at the agreed price.<\/p>
Here are some pros and cons:<\/p>
\n\nPros<\/h4>\n
- \n
- You can make big returns if the prices swing in your favour.<\/li>\n
- You'll have direct ownership over your investments.<\/li>\n <\/ul>\n <\/div>\n \n \n
Cons<\/h4>\n
- \n
- You could lose a lot of money if your predictions are wrong.<\/li>\n
- Not all platforms offer the option of investing in metals futures.<\/li>\n <\/ul>\n <\/div>\n <\/div>\n
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