Educating yourself about how the stock market works will pay its own dividends as you start understanding how to make more profitable trades. Carefully consider the companies reputation and the past market trends of each stock you are interested in before you purchase any.
Continue reading for some excellent advice on stock trading, and you may be looking at your own profit reports very soon!
Stock trading is not a 1 size fits all approach. You need to figure out what you really want from it.
Ask yourself the question now;
Do you want to do this for a living?
Are you looking to grow a retirement account?
Do you want dividend income?
Are you high risk or just looking for something better than savings?
All these questions are important because they steer you in the direction you need to head, whether that’s going the risky route looking for a stock to make you a millionaire, or just investing in easy solution that historically has provided better returns.
I’m going to break down 3 strategies below, bare in mind I’m not a financial advisor or a self appointed guru but someone who is simply doing as he says.
1 – Index Funds
Index funds have always been a solid way to invest. In fact they’ve outperformed most funds and other savings types for as long as they have existed.
With an index fund you can put away as much or little as you want, it doesn’t really matter.
Most people put in a set amount per month, perhaps a portion of salary.
Your investment is with all the top companies in that chosen fund rather than 1 or 2 companies.
Sure you can invest in blue-chip stocks but wouldn’t you rather invest in a fund that simply tracks that top stocks?
2 – Up and Coming Technology
If you go in on the dot com boom in the 90’s you would have made a lot of money.
The same can be said right now for things like battery technology (see the Tesla Killer Blue Gas) and 5G which is a huge one right now.
A lot of people have been getting in on 5G companies early, but for 5G to thrive it relies on technology that the big companies don’t necessarily have access to right away.
In fact it’s smaller companies that an investment into would end up with you seeing huge returns.
A prime example is what one expert is calling the 5G Master Key which essentially is a smart chip that will help companies like Apple develop their 5G enabled phones.
3 – Dividend Stocks
A lot of people overlook the power of dividend stocks. It’s a reason why Real Estate is such a popular investment because you don’t have to just rely on it going up, you actually get a monthly or quarterly dividend.
There are various stocks out there that are paying very healthy dividends. You can look at dividends.com to see their list of dividend paying stocks.
Of course you need to do due diligence to make sure these aren’t bad companies, but if you pick solid companies it can provide a nice chunk of residual income.
Set Aside A Percentage Of Income
One thing I have to stress is that if you are looking to get rich from stocks it won’t happen overnight in most cases.
It especially won’t happen if you only have a few $100 to invest or even a few $1,000.
This is a long term play and you need to be thinking 10, 20 even 30 years.
That means if you are a 25 year old now, you’re thinking about what your portfolio might look like in 20-30 years time when you retire.
Sure you might get lucky on a few tech stocks but overall it’s a long term thing.
The best thing to do is set aside a percentage of your income. Let’s say your take home page is $5,000 a month. Set aside $1,000 for stocks.
You could put $500 into an index fund, $300 into dividend stocks and $200 into higher risk but bigger reward companies, like technology.
Over a long period of time the index fund will be the one to watch however if you are putting $200 a month into higher risk stocks you can bet that some will play off.
It’s always a good idea to follow investing newsletters for these new tech stocks. I am not advocating paying any premium subscriptions, but simply paying attention to what the newsletters are talking about.
Then you can do your own research to find stocks that fit the criteria.
Here is a list of resources I use for research: