Times are tough right now with everything that’s going on, but it’s also a wonderful time of opportunities too if you’re positioned right. One of the ways many people are profiting from the pandemic is through stocks. Due to way the world has changed, many things have become much more important than before, meaning that their stocks are skyrocketing in value and there’s a lot to be made. While I wont tell you which stocks to buy, I will share 4 tips for getting into trading stocks so you can try your hand at investing in this way.
1. Start Small
You don’t have to start with thousands or even tens of thousands of dollars to get into the stock market. You can find stock options that allow you to start small and you can add to your portfolio every few months, choosing to slowly build your assets up that way. Starting small is a good way to get a feel for how buying stocks feels and it’s also a great way to get started without putting too much money on the line. You may feel there’s no point in starting small, but small purchases over the course of a few years can really add up.
2. Consider Getting into CFDs
The Contract For Differences – commonly known as CFDS – allows people within the European region to exchange the difference in value of a financial product between the time the contract opens and closes. When dealing with CFDs the investor never actually owns the product, but they receive revenue based on price changes of the product. The advantage of a CFD trade is that allows you to trade with a higher leverage than traditional trades, allowing you to potentially enjoy higher returns. Online CFDs can be a great way to get trading if you don’t have a lot of capital to invest, but be warned this is a very fast pace type of investing!
3. Do Your Homework
You’re going to want to research the companies you invest in. Set aside a few hours to analyse the stock’s past performances as well as learning a bit about the company and where they’re headed. Right now are quite turbulent times for many companies around the world, which can mean incredible growth, or higher risk. Doing your homework properly can ensure that you put your money behind companies that are set to grow, ensuring the value in your stocks continue to increase.
4. Reduce Your Personal Spending
If one of your goals is to invest as much as you can, one of the ways you can increase how much capital you have for investing is to reduce your personal spending. Even cutting back as little as $10 a week can give you an extra $500 a year to be able to invest. Over the course of your lifetime, that can add up to a substantial difference. I personally like to have a savings account that automatically deducts money from my spending account every time I receive my pay cheque. This means that I’m continuously adding to my investing fund, ensuring that I can keep it growing as fast as possible.
Do you have any tips for someone who’s just getting started with trading? Let me know in the comments below!