Jan
03
For A Low Risk High Return Short Term Investment Which Is Better? Stock Market Or Currency Trades?
ByIm only looking to invest a small amount of money ( < $500)and im hoping that this will return more money which i can later invest to turn addition returnes
8 Comments
January 3rd, 2010 at 8:21 am
Buysing stocks with less than $500 isn’t even worth your time. Let’s say you go out and do 5 hours of research and pick out 2 stocks to buy. You go through 3 more hours to set up a brokerage account. Then 2 more hours watching the markets waiting for your buy point. Next, you spend $14 ($7 each) to buy the two stocks. Now you spend 10 more hours over the course of the next few days or weeks, watching the stocks, checking the quotes, etc. Let’s assume the stocks did quite well, and were both up 30%. Now you decide to sell, spending $14 in the process. You started with $500, paid $14 in fees, gained 30%, and paid $14 more in fees, ending up with $618, a gain of $118. You put at least 10 hours of work into it, likely more. But at 10 hours of work you gained $12 an hour. Oh, and that’s also taxable. So even under the best of circumstances, you might be able to earn $12 an hour, if you’re really good and really lucky. But this is all very unlikely, and takes a few weeks too. Best “investment” you can make it to get a part-time job, and save up more money to invest one day. Even at $8 an hour, you’d probably come out way ahead. Work 20 hours a week, at $8 an hour, and you’re making $640 a month. That’s probably the better investment of your time, so that one day you can make investments with your time and your money.
January 3rd, 2010 at 10:43 am
If you’re good at it, you can make money in both markets.
Based on your experience and looking at the money you have available for investment, you should give careful consideration to investing rather than trading until you get some experience
You should educate yourself first, before you start spending your money, if you don’t you will loose it.
January 3rd, 2010 at 11:06 am
The basic thing which a beginner learn during trading classes is “high risk high return and low risk low return”. Treasury bills are called the risk free stocks and therefore it bears the lowest returns. Forex involves high risk and thus gets the highest return.
Therefore if you can bear risk you can get high return. Short term trading do fetches good returns but then you should have good market knowledge, clear technical concepts and a perfect trading platform which provides you with sufficient trading techniques and tools. Even taking expert opinion while trading is also a good option.
Forex is the best if you are aiming high returns. just update yourself with the above points and start trading. Small amount is no issue to some dealers like FINEXO which provides facility to open account witha minimum of 25$.
January 3rd, 2010 at 3:13 pm
There are no ‘low risk’ returns that are a guarantee. With only $500, you are likely to get eaten up by transaction fees if you trade regularly, so you need something to hold on to for at least several days as a ’swing trade’, or longer. Currency markets are notoriously high risk and volatile, and if you don’t have the skills, avoid.
As far as stocks, short term, either self educate yourself on technical stock selection or use a newsletter or reputable stock picking service.
January 3rd, 2010 at 7:52 pm
FX = Very, Very High Risk (wait till you’ve been using “Technical Analysis” for at least 5 years).
Stocks = Risky to very risky.
I can’t tell you how many people have tried for the “big one” and lost. If you choose stocks…. don’t go near the typical mistake of new investors….. penny stocks.
Take a year before you do this and read at least 6 books on investing and trading.
Three of my favorites are;
Investing For Dummies
Trading In The Zone, Mark Douglas
Mastering The Trade, John Carter
January 3rd, 2010 at 8:04 pm
Currency is never low risk and stock market is always high risk short term. But when some genius who is on good terms with God, reveals to you how to walk on water, please let me know.
January 3rd, 2010 at 9:10 pm
Neither is “low risk”, but currency trading is the riskiest.
January 4th, 2010 at 2:23 am
I would recommend CDs.
Check out this blog and all the links on it.http://www.financecd.blogspot.com