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Beginner Investor Tips
Managing your money is critical in these days of uncertainties. All potential investments come with risks and rewards. Usually the higher the risk the higher the reward. For example, investing in a high tech start-up is risky because the probability is you will lose all of your investment. However, the payoff, or reward, can result in earning 10 to 20 times your money back or more. Investments include stocks, bonds, precious metals, forex trading and stock options
Binary OptionsOptions are sometimes called binary options because there are only two results. Investors believe the value of the stock will increase or decrease. Depending on the investment service, the payoff can be as much as 85 percent or at little as 0 percent.
Binary Option StrategeyIf you want to invest in stocks but you're not sure you have the knowledge and experience or the required capital to invest in publicly traded companies, learning about binary option strategy is a good start for a beginner. You choose one company and only have to predict whether the stock price will increase or decrease.
Publicly Traded StocksStocks are bought through the major trading platforms such as the New York Stock Exchange or NASDAQ. The price is based on the current market value at the time of acquisition. Stocks are usually purchased in blocks of 100, rather than one by one. This means that the investor has to have a substantial amount of money to invest. For example if the stock is $32.00 per share, a minimum of $3,200 will be required. Penny stocks are publicly traded shares of stock that have been de-listed on the major stock exchanges but can still be bought. While shares bought for a few cents can increase within a short time to a few dollars, resulting in substantial profits, reselling shares that haven't increased is challenging.
Mutual FundsMutual funds buy a variety of publicly traded stocks, that the mutual fund managers believe will increase in value. Investors buy shares of this portfolio. The companies within the funds or portfolio can change without the investors knowledge or approval. The returns are less than buying the shares directly -- the mutual fund management takes a share of the profits -- but the funds usually carry less risk.
Other InvestmentsBonds are debt instruments, rather than shares of ownership. They are safer, or less risky than equity shares, but the return is minimal. Savings accounts are one of the safest and least profitable methods of investing.
Precious MetalsInvesting in gold, silver and platinum can be done by buying shares of companies that invest in the metals or buying the metals themselves. If you buy the metals, keep in mind that you will need someplace secure to store them. Theft is always a risk.
ForexTrading on the currency exchange market requires selecting two different currencies and selling one to by the other at specific price points. It requires knowledge of foreign currencies, what effects their value, and the International marketplace. The advantage is that the market is open nearly 24/7 and closes for only a brief time on the weekend. the disadvantage is it's possible to lose money quickly.
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