By Jacob Maslow–Branded Content
Are you shopping around for a way to get involved in the stock market? Fortunately, in the era of online investing, there are multiple ways to put your money to work in the securities exchanges, aside from traditional approaches like buying and holding blue chip stocks. Today’s market savvy investors know how to pool their resources, follow social trends, leverage the power of low-cost issues, earn profits from day trading, minimize risk by owning index funds, and reaping the rewards of owning shares that pay regular dividends. For anyone who finds the traditional strategies boring and limited, the following approaches offer a fresh way of earning a potential profit on investments of any size.
Numerous brokerage sites allow account holders to follow a guru, or selected member who has years of experience in a particular niche, like consumer goods or the financial sector. New members can simply follow the leader, whose purchases and sales are listed on the site so whoever wishes can replicate their actions.
There is no set-in-stone definition of what a penny stock is, but most agree that any shares priced below the $5 level qualify for the title. One of the best things about penny stocks is that you can purchase multiple shares for a modest amount of money. Plus, you can review a penny stock trading guide that teaches the basics for beginners who want to start out with accurate information.
Another key benefit of this asset class is that many of the low-cost shares have plenty of room to grow. Of course, there are no guarantees that any corporation, large or small, will be a long-term success. But unlike blue chips and other high-priced issues, penny shares sometimes rise in price considerably. You need not be a mathematician to see the difference between an investment the costs $5 and rises to $50, compared to one that costs $200 and rises to $225. Penny stocks represent a potentially large upside and a relatively small downside in most cases.
If you’re the type who doesn’t like to hold positions overnight, and enjoy the fast-paced action of doing several transactions per day, day trading might be your best choice. People who day trade go to cash before the end of each session and typically specialize in just one or two companies’ stocks. Deals move at lightning speed and you’re never left wondering, at day’s end, whether you notched a profit or a loss.
If you prefer to play the entire market all at once, or even an entire sector of it, index funds offer the opportunity to take part in the general movement of the whole securities market or the segment that interests you. For instance, you can buy shares of various funds that track the Dow or S&P, or buy into indices that include only financial institution, or only manufacturing company issues.
Some build portfolios that consist exclusively of dividend paying stocks, which means they receive payouts on a regular basis. There are aristocrat companies that have long histories of paying dividends every quarter. For many years, there have been people who only purchase these kinds of stocks.
Photo Courtesy of Jacob Maslow//Cosmic Press