Table of Contents
- Stock Trading – Not Just Investments
- Stock Investment
Stock Trading – Not Just Investments
Stock Trading: Online stock trading is a money market concept involving buying and selling stocks, equities and shares from large corporations listed in the stock exchange or securities market. The stock trading practice involves investing money in corporate shares provided by either individual, companies, multinational groups or international conglomerates. Regardless of where you invest your money, the profits and losses in online stock trading are determined by the gap between buying and selling prices.
If you are keen on online trading, then you’ve probably heard a lot about stock investing too. Stock investing is different from stock trading, although they may sound similar to a layman. Stock trading is a more hands-on and short-term buying and selling practice, while stock investing is more about keeping your funds intact for the long-run.
Stock investing is generally done with financial instruments such as mutual funds, but stock trading requires you to input quite a hefty capital. Stock trading also requires the investor to pay great attention to stock market activity, to monitor and detect the best times to get in to and out of his online trading. The efforts required in stock trading are vast, because stocks are traded during daytime – a limited time period to be on your toes.
Your ideal solution for making a good profit out of your stocks and shares is to hire a stock broker. A stock broker will be a registered and commissioned individual with extensive expertise in stock trading or online trading in general. The paperwork required, the winded processes, monitoring and analyzing will all be done by the stock broker, so you’ll be free from worry.
Stock trading is a precision-based activity and one tiny mistake in judgment could send you plummeting right to the bottom and result in a huge loss. Likewise, the opposite could happen too. One good break and you are well on your way to massive riches. A reliable and honest stock broker will be able to keep the balance in your online stock market trading and make the best out of your investment every time.
Online stock trading is the current vogue in the global money market, with many traders and brokers opting to trade their shares simply based on live statistics posted on reputable online stock market trading websites. This online trading phenomena is relatively new, although the concepts behind online stock trading are the same as in real life. Let’s take a few moment to examine online stock market trading more thoroughly.
Stock trading is risky business, there’s no doubt about it. Understanding the stock market outcome realities is just the frosting on the cake. The actual process involves a lot of skill, research and discipline. Using stock trading to make instant riches is foolish, because nothing worthwhile is ever quick and easy. So, where does online stock market trading come in to this picture?
Online trading is no different to ordinary stock trade in the huge day market. The best benefit available in online trading is geared for the beginner, who can learn, monitor and trade small-time online stock trading activities while in the comfort of their own home.
The rise in client demand for online trading has lead many stock brokers and online financial companies to open their doors to the online stock market trading concept. Price indicators, trend analysis, fluctuations and everything else gets automatically monitored within online stock trading websites. This simplicity and utter convenience makes more and more traders to log-in and watch out for the best opportunities and invest their money wisely. But, remember, online trading is not guaranteed to make everything perfect, because the stock market is still the stock market, with its tendency towards extreme volatility.
Why Should You opts For Stock Investments?
Stocks are an A-grade online investment opportunity when it comes to asset worth. This is why a stock investment is always worth the time and effort you put in to researching and processing it. Stock investing has a higher probability of yielding better returns over time, in comparison to other investments such as real estate and bonds. Stock investing has many advantages, but that doesn’t necessarily mean it’s pitfall-free.
The Advantages Of A Stock Investment
Returns: Worth mentioning repeatedly, the returns on a stock investment is always much higher than what you get from other online investments. In the long-term, stock investing will give you better profits through outperforming CDs, bonds and savings accounts, as well as various other monetary online investments. A stock investment returns 10% per annum on average, while others yield a return between 5-7% annually.
Taxes: A stock investment is taxed at a very low rate, especially if you hold on to the investment for at least a whole year. When you put your stock investment up for sale, you will be taxed under the long-term capital gains clauses, which would make your tax deduction as low as 15%. The standard tax rate on any other partaken online investment opportunity is 35%.
Diversification: You cannot diversify a real estate investment opportunity can you? Unless you are a multibillionaire with nothing else to do with the money, diversification is simply not an option in real estate and other investments. The possibility of a real estate invested in going down in value is much higher, because the specific area you concentrated on may not be so popular after awhile. While a stock investment also has the possibility of falling down to zero because you invested in the wrong company, you can still make a good profit from your stock investment portfolio when you have diversified it.
The Disadvantage Of Stock Investing
Stock investing can be disastrous if you don’t take the time to do a risk analysis before making an online investment. An investment opportunity can be glorified and blown out of proportion by marketing campaigns, but you need to be a prude with your money and do a thorough background research on the every possible stock investment opportunity. Properly assessing the risks will keep you prepared for eventualities and help you diversify your stock investment portfolio.
Top Stock Investment Traps To Avoid
When we speak of stock trading and investment traps, you might think we are talking about online investment scams or some such unethical behavior by crooks. Interestingly, stock investment traps are not just for online investment opportunists to be wary of. Common investment traps include high fees, fear, greed and infomercials.
High Fees: Whether you are considering online investment or otherwise, be wary of high fees incurred in the forms of broker’s fees, communication bills, unnecessary investment advice and investing in supposedly high-yield mutual funds.
Fear and Greed: Probably the worst trap ever in stock investing, fear is just your low confidence telling you that you can’t do it, because it’s impossible. Stock investing is not about buying when everybody else is buying and selling when they all sell. This type of stock investing will force you to sell stocks for a lower price,, when you bought it for a much higher amount. Greed is another culprit plaguing stock investments, because if you trade more often at the wrong time, you will fall.
Infomercials: These are just promotional campaigns and nothing else. You must never pay heed to the “corporate tycoons” blabbering on about the “best online investment tool for your stocks” or the “best stock investment broker in town”. At most, these infomercials sell worthless products and in the worst case scenarios, they are scams.