While stock market investment may have been historically associated with experienced traders or those approaching retirement, the financial landscape has changed considerably in the last decade. In fact, technological advancement and the removal of numerous barriers to entry has actually made stock market trading far more accessible to a younger demographic. This does not mean that it is suitable for everyone, however, especially when you consider how geopolitical and social unrest continues to threaten the equilibrium of the global marketplace.
3 Stock Market Investment Options to Keep in Mind
With this in mind, you will need to be strategic and considered when plotting your assault on the stock market. Consider the following investment vehicles and methods: –
Also referred to as stock or equity trading, this is arguably the single most popular investment method on the financial market. A stock is essentially a certificate that affords the ownership of a certain amount of company equity, and it is often sold by corporations who looking to raise significant revenue. Each share represents a particular percentage of equity, and it provides tangible wealth that can be bought or sold at the discretion of the owner. As a note of caution, it should be remembered that the value of your investment will often fluctuate in line with company performance or prominent industry trends.
While stock trading carries a heavy burden of ownership and poses a relatively high level of risk, dividend investment offers far more security for risk-averse investors. A stock trader can only generate income by selling their shares once they have gained in price, for example, and unfortunate individuals can find themselves lumbered with unprofitable and depreciating derivatives. If you invest in dividend stocks, however, you are essentially backing consistent, blue-chip companies that will pay a quarterly sum based in performance. Firms like Coca Cola provide a relevant case in point, as the value of their stock has risen consistently for more than a decade and therefore regularly deliver reliable returns to investors.
While the first two options may differ, they are united by the fact that they both offer investors direct ownership of equity. This brings its own unique risks and rewards, as ownership can restrict investors while also offering them a sense of tangible wealth in an uncertain economic climate. Stock market traders may also want to consider spread betting, however, which essentially enables you to bet on whether particular share prices will rise or depreciate within a specified period of time. This makes it possible to profit regardless of the performance of each individual stock, and subsequently releases you from the potential burdens of ownership.