Many stock traders specialise in a group of stocks, such as tech stocks, energy stocks, automobile stocks, or others, but still need to follow the market news regarding the individual companies in their basket. There are thousands of stocks available for trading, and obviously you can’t track and analyse them all. Are you really passionate about the markets, and can you devote long hours throughout the week for trading? Or would you rather buy your portfolio of stocks and forget about it? The first thing you should ask yourself is how much time and interest you have for investing. How much time and interest do you have for investing? As you can see, the return on stocks has been higher compared to all other asset classes, the lower-risk bonds and bills are second, and gold is third, tracking the inflation rate. The following chart shows you the total return index for stocks, bonds, bills, and gold. On the other hand, index funds which track the performance of a specific group of stocks are also a viable alternative which can have reasonable returns combined with lower risk. The stock market usually outperforms many other markets, such as bonds or the commodity market, but also carries a higher degree of risk. Stock trading can be a lucrative undertaking if you understand the risks before you start investing.
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