3.17.2011

Choosing the Right Stock Trading to Invest

Stocks, also known as trading shares, are one of the options available for those who want to invest their money. Other options include bonds, real estate, and bank deposits. These present ownership rights to a company, allowing investors to part-own firms they would never buy outright. It is a well-known fact that in the long run, stock prices always rise, mirroring population and GDP growth. Since new companies emerge while older ones wither away, choosing the right stocks to invest in can be tricky. Investing in shares of stocks requires a consistent, deliberate approach. This removes a lot of the emotionally driven investing decisions that typically lead to poor choices and lower returns.

Share trading online has now become the norm for individual investors and traders for the past decade. A lot of brokers now are offering online services with unique trading platforms. There are two basic methods of stock trading: on the exchange floor and electronically. Trading on the floor is the image most people know of on how the market works. When the market is open, there is a melee of hundreds of people rushing, shouting, watching monitors and entering data into the terminals. The electronic markets use vast computer networks to match buyers and sellers, rather than human brokers. A lot of large institutional traders, such as pension funds, mutual funds and others prefer this method of trading.

There are several strategies in trading shares such as dollar-cost averaging, trend trading, and investing in Dividend Aristocratic stocks that can help guide your decisions. Dollar-cost averaging involves investing a set amount of money at regular, periodic intervals. Trend trading is another strategy with clearly defines buying and selling rules. This involves using technical indicators such as moving averages to identify newly formed trends. The Dividend Aristocrat strategy involves investing in shares of stock of companies that are part of the S&P 500 and have consistently increased dividends for at least the past 25 years.

In Share CFDs, you do not have the entire amount as you would in any traditional shares, instead you simply pay a deposit on what is commonly called margin. With favourite provider, you can trade with the most popular liquid shares through their listing on the Australian market. One of the benefits of CFD trading compared to traditional trade sharing is the benefit of gearing. This allows you to open a share CFD position with a small margin deposit. A share CFD captures many aspects of traditional sharing, except you can benefit from gearing as you don’t have to pay the full contract value. With no fixed expiry date, you can choose to close your share CFD position at any time. You open and close your position at the actual market price. Your account will also be debited or credited to reflect interest and dividend adjustments. You can open an account with my provider of choice to access thousands of markets, with highly competitive rates. You can apply in just a few minutes using their automated form or download and print a PDF form available in their website, www.igmarkets.com.au.

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