If you’re excited about the prospects of making money quick on the stock market, chances are you’re young and don’t have much experience with investments.
If this is you, the one thing you need to bear in mind is that there is no quick route to riches on the stock market. The more eager you are to make money, the chances are you’ll take on a lot of risk to try to achieve it.
So what should you do to make money on the stock market?
Making money on the stock market
There’s nothing wrong with having ambition and goals of what you want to achieve investing. But it’s also important to have realistic goals.
If trying to make profits quickly appeals to you, trading may be worth considering. This means making short-term trades to try to exploit small movements in the market.
You also need to have a healthy appetite for risk and understand that you can lose a lot of money if trades you put on don’t work out.
If you think you are suited to trading, you also need to keep in mind the tax implications. If you do indeed make a lot of money from trading, you’ll have to give the revenue authority its share of the winnings.
What to do before you put any money to work on the stock market
Before you put any money into trading or investing, you need to ensure you can afford to.
If you want to try to boost your returns, it’s important to keep the majority of your investment capital in lower-risk investments. This will help to offset some of your trading risk.
To become successful at trading, as well as having a good strategy, you need to have strict risk management. Otherwise your losses could wipe out your trading account.
How to invest in the stock market?
If you are looking to spice up your gains with more speculative investments, you need to understand the risks you face. If you’re happy with this, you can look to invest in small companies like penny stocks, single stock futures, contracts for difference and other derivative instruments.
To lower your overall risk, invest in solid large companies for the long-term. Bonds are also a consideration.