How to Make Your Money Trading Stock

How to Make Your Money Trading Stock

Interest rates on savings accounts used to eclipse 5.0% decades ago. The average interest rate is 0.09% in the United States today. Unsurprisingly, saving for retirement no longer makes sense with a savings account alone. Compound interest doesn’t provide adequate growth with such low rates. More and more consumers continue to turn to the stock market for increased earning potential. Is it possible to earn money from trading stocks today?

Fortunately, the answer remains a resounding “yes” at the moment. Markets have up and down years where stocks grow and decline based on countless factors. Historical trends dictate that stocks, in general, grow more than they decline. The markets, as a whole, perform in a positive trend over long periods of time. In one year, markets may decline an average of 10% and then spend the next three years growing 20% on an annual basis.

Predicting The Market Is Challenging, But Gains Are Always Possible

Myriad factors dictate the performance of individual stocks and entire markets. It’s impossible to accurately predict the stock markets all the time. Even the best day traders and stock analysts make poor trading decisions. Without a doubt, you can make money trading stocks, and there’s never a bad time to start. Profits are always possible whether the market is down or up at any given moment in time.

Choosing A Stock Brokerage That Helps You Grow Your Portfolio

First and foremost, you’ll need to find a brokerage in order to get started. Various brokerages offer accounts to individual investors. Common solutions include TD Ameritrade, Robinhood, Charles Schwab, and dozens of others. You’ll want to base your decision on the features and services provided. Nonetheless, it never hurts to prioritize brokerages that provide quality data, no-commission trades, and thorough reports.

Some brokerages are self-guided, which means you’re in total control. Other brokerages offer guided investments where someone else makes the decisions. Either way, you should choose a brokerage that makes managing your portfolio more simple. Every investor should want a brokerage with low or non-existent fees and all the tools necessary to succeed. Nothing is worse than seeing your potential gains eaten up by maintenance or trade fees.

Figure Out Your Investing Strategy Before Placing A Trade

You’ll then need to decide how you want to proceed with investing. Perhaps you want to focus on individual stocks. Otherwise, you might consider investing in index funds, which try to follow the performance of the S&P 500 or another index. Investors need to decide whether they want to invest based on companies they believe in or some other criteria. The last thing you should do is pick and choose stocks blindly and without consideration.

Start Placing Trades and Focus On Long-Term Investing

After you choose an investing strategy, you need to place your first trades. People start their investment journey with widely different funding amounts. Not everyone can afford to spend hundreds or thousands of dollars on stock trades each month. Luckily, you can start investing with relatively little money. It’s more than possible to place trades here and there when you can’t put large amounts of money into the markets.

Regardless, the key to successful stock investing involves long-term investing. You need to avoid focusing on short-term gains and losses. Doing so clouds your vision and makes you unable to see the earnings potential of stocks over many years. Undoubtedly, long-term investing makes overall gains more likely than overall losses. Put money into your chosen stocks and let them sit and grow in value for as long as possible.

Start Now and Reap The Rewards For Years To Come

The end result could be a fairly large nest egg in 20 or 30 years. In the end, investors that start trading stocks as early as possible stand to earn a lot of money. Stocks should be considered a long play, and your portfolio is likely to grow over time. A down year here and there is expected, so don’t panic too much. Your nest egg could start at a few hundred dollars and grow into hundreds of thousands of dollars in 30 years.

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