Which of These Stock Investing Strategies is Right For You?
Stock is the shares in which ownership of a company is divided in a limited number of owners. In American English, the stocks are collectively referred to as “stock”. Each share of stock represents fractional access to a company in proportion to its total number of outstanding shares. The price of stock can be traded publicly through brokers. Or, investors may choose to trade in stock through a broker.
A major part of trading on the stock markets is the ability to accurately determine the value of stocks and shares. Some of these “commodity products” are futures (contracts for the sale of goods that cannot be delivered), currency, options on certain stocks, as well as bonds. All of these different types of “commodity products” are priced for trading on publicly traded exchanges. The pricing on these different types of securities is determined by supply and demand, government regulation, and current economic conditions.
Stock Exchange Traded Funds (ETFs) are one of the most popular ways of buying and selling shares on the stock exchanges. ETFs track individual stocks and portfolios. Many ETFs are mutual funds; however there are some that are specifically designed to track individual stocks or specific sectors. ETFs generally track the performance of an index, like the Dow Jones Industrial Average or the FTSE 100. ETFs are also becoming more popular with smaller investor portfolios.
Investing in gold is an excellent long term investment strategy; however it should be part of any comprehensive long term investment plan. Gold is one of those metals that is not only accepted around the world, but also has a history of success. Investing in gold can add value to your portfolio, especially in the long term. Investing in gold has been shown to help stabilize prices, so if investing for value is important to you, investing in gold may be worth a closer look.
Penny Stocks: Many companies choose to list their stock on the stock exchange, especially during an economic boom. This often means penny shares, also known as micro cap stocks. Penny shares have very high values, but unfortunately are extremely vulnerable to manipulation and fraudulent transactions. Investors in the penny share market need to exercise caution.
Which of these investing strategies is right for you? That all depends upon your risk tolerance, your level of knowledge and understanding, and your budget. If you are comfortable taking a chance with stocks, then penny stocks may be right for you. If you’re more comfortable investing in traditional securities, gold may be the smart move for you. No matter what your preference, do your research and understand how the stock market works before investing. With a little bit of smart investing, your portfolio could be transformed!