Investing is traditionally done on Wall Street, buying and selling stocks. When people think about it as a general practice, that is what they think of. If you read a David R Kiger Businessweek article, for example, it will probably center around this type of investing. It has been around for decades, and it is simply what most people know about. If they decide that they want to start buying private stocks, they assume that they need to get a broker who works on Wall Street and start going about it from that direction.
However, the world has been changing massively in recent times, and there are now many different ways to invest. This does not mean that the old tactics are gone, by any means, but there are new options for people who are interested in trying something different. Before starting out, it is important to look at a few of these choices so that you can decide what you want to do.
The Forex Market
One thing to consider is the forex market. Forex is just a shorthand way of saying “foreign exchange”. This market is driven by the fact that the values of currencies, when paired together, are always changing. This change is relative to the two currencies. For example, the Australian dollar could be worth three US dollars one day and worth three and a half the next week. If you bought it when it was worth three and then traded it back in at three and a half, you would make fifty cents on every dollar. That is an extreme example of change, but even small change makes it possible to invest.
Another option is the market for penny stocks. These are very small stocks that are worth less than one dollar on the whole. You typically trade them the same way that you trade regular stocks, though the movements are going to be different, as are the quantities of shares. For the same amount that you would spend on a single share of a large company, you could get dozens or even hundreds of shares of a smaller company. On top of that, most traders use a short-term system when doing penny stocks, while larger investments could be made for years on end.
If you do not want to invest in personal stocks, you may think about investing in commodities. These are tangible, real goods that you buy shares in, like gold or oil. Other than that, they work just like stocks. The difference is that you have purchased something solid and real, rather than purchasing part of a company’s value, so the type of movement that you are going to see is different.
One new way to trade is with binary options. For these trades, you just look at the stake price of something like a commodity or a forex pair. You decide if you think it is going to drop or rise over a set period of time – generally, your time periods will be five minutes or so, but some people trade for expiration times all the way at the end of the day. You are offered a promised return of around 70 percent to 90 percent if you are right, but you do not get anything back if you are wrong. Some people view this as nothing but gambling, but others look at charts and graphs to figure out what the values are going to do.
Trading from Home
Finally, no matter what option you choose, one of the biggest differences in the modern world is that you can now often trade from home. This is done using online brokers and web-based trading platforms. You no longer have to go to the stock exchange or work with someone who is there. It is the same type of trading, but you control it over the Internet.