4 Ways to Invest your Money Online
How to grow one’s personal income is one of the most prevalent questions today. Wild thoughts are entertained, from earning big at the casino to winning the lottery. “Invest,” they say. Invest? How? Don’t you need to be rich for that? Actually, personal income growth is within virtual reach: through a method of investment right at your fingertips.
Online Investing: A Switch of Strategies
Option #1: Forex Trading
Foreign exchange or forex trading is a type of online investment that depends on the floating, or changing, currency exchange rates. To trade in forex, you choose a currency pair, such as the Euro-Yen. Your aim is to buy Euro at the lowest possible price, and then sell it at the highest possible one.
Currency worth depends on supply and demand. Instability can lower currency worth, such as a coup d’etat or an earthquake. Because of the uncertainty, the currency is weakened. On the other hand, if the Gross Domestic Product (GDP) is high or the nation’s credit rating upgraded, currency values increase.
Option #2: Binary Options
Binary options online trading is a form of investment with two choices: “Call” or “Put.” The investor predicts the change in price of a certain asset. It can be stocks, a commodity, or a currency pair. To “Call” means to predict a price increase; to “Put” means to predict a price drop. You either add to your capital (if right) or lose part of it (if wrong).
Like with forex trading, changes in prices can also be tracked by watching the supply and demand of the asset. For example, at the moment gold commodity prices are not likely to rise, because of China’s sale of bullion and the low demand from gold-consuming India.
Option #3: Copy-trading
Copy-trading is a form of social trading. Social trading is community-based trading, where users can see each other’s’ transactions, and discuss tips and analyses of the investments. Copy-trading happens when an investor links his account to a more experienced user’s, and copies every transaction exactly.
For investors who want to become independent eventually, the research is more on how the more experienced users analyze and apply what they know to trading. For others, the research is done on the stability of the user they want to copy-trade, if they make steady profits and take less risks.
Option #4: CFD Trading
Contract for Difference or CFD trading does not require you to own any assets directly, such as stocks or commodities. Instead, you are trading on the margin of the total trade value of the stock. This means the initial capital output is relatively low, compared to the amount needed to trade in stocks. Then, you can buy and sell that margin of stock value as others would their stocks.
Like with forex and binary options trading, information on the asset you are trading on is key. For your marginal stock value to increase, the company must be doing well. A shock to that company will cause your marginal stock value to decrease.
Invest Your Money Online
Whether it is a short-term plan to raise capital for future business, or a long-term approach to a sustainable lifestyle, online investment is a good place to start. The relatively lower capital output and the need for research and analysis to make decisions is also a good training ground for larger, more long-term investments.