You may have already guessed that my financial priorities have been changing lately. When I first started this blog, the priority I was pursuing with the focus and determination of a top athlete was recovery: recovery from the rather large consumer debt that the 2008 credit crunch brought with it. Well, it did bring it but we also fell for it (here, I did take some responsibility and it feels good). Now that we will be debt free in a matter of months, I am determined that the good habits of earning more and spending less are not going to go to waste. This, however, means that we will have a rather large positive cash flow and we have to decide how to invest money. Of course we can leave it in savings accounts – it is probably time for us to have maxed up ISAs – but is it really worth it? Keeping large amounts of money in savings accounts, particularly at the current pitiful rate of interest, is like keeping water in a dam when the crops need watering.

This is why I have been looking very seriously at different investment options and finding that this is so complex it makes my head hurt; and there aren’t many things that do that. From what I have seen though, investing is a combination between science, art and gaming. This is what makes my head hurt – I can’t think of another activity that combines the three; these also need completely different sets of competence and different combinations between knowledge, intuition and awareness of risk and probability.

Probably the best example of investing as science is provided by the Boggleheads’ philosophy: this is all about well informed choice. It may be choice of lifestyle, choice of investment instruments etc. Interestingly, approaching investment as science and research features both a particular stage of learning about it and specific investment instruments. I believe that research is absolutely essential to be able to choose risky stock to buy; and that this research should be rather broad (learn most there is to know about the product, the company, the key people in the company and the others who have similar product).

Next, is investment as an art form. This, I believe, kicks in when one is shaping and re-shaping their portfolio – what investment portfolios look like is not a matter of science and research but of feeling and balance.

The aspect of investment that fascinates me most is the gaming part of it. This applies to specific investment instruments like some options, exchange-traded funds (ETFs), CFD trading (Contract for difference) and different forms of financial spread betting. These are all rather speculative investments. CFD trading, for instance, is an equity derivative used by traders (investors) to speculate on the share price of particular shares without actually holding any of these shares; the contract between the two parties is about paying the difference between the current price of the share and its value within certain time frame. High risk but can be potentially very rewarding.

Now, if I were you a question will be forming in my head: how is doing CFD trading different from betting on the horses?

It is different because is still needs a large amount of research and art to be able to do it to your advantage. CFD trading success is a result of knowledge and application.

Looking at these three aspects of investing – science, art and gaming – I have been thinking that I have a bit of a problem with the latter two. Science is not an issue: I even cook like a scientist. But do I have the imagination, abandon and courage for the other two?

How about you?