For investors, the beauty of their art lies in its variety. Although most people will automatically think of the stock markets when trading is mentioned, the term actually covers a wide range of asset types and financial instruments, and this is one of the reasons why so many choose to give it a go. With options to suit every personality type, budget, and approach to risk, there is a market to complement each would-be investor, meaning that no one is immune to its lure.
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Yet finding the right one for you can take a lot of time and effort. There is a wealth of information out there to help inform your decision-making, but sometimes the depth of research required can feel overwhelming. To simplify things for you, and give you a good place to start, here is some advice on the types of trading that might suit you…
#1: Low Risk Traders
A lot of people are content to view trading as a simple supplement to their income, not a source of generating great riches, and if you’re amongst them, you’re unlikely to favour gambling your fortunes on the markets. Thus, low risk investments will probably be your best option. Precious metals can be a particularly good place to start, as they’re commonly viewed as ‘safe haven‘ assets. Savings bonds and fixed annuities might also be ideal choices if you feel the need to flesh out your portfolio.
#2: Medium Risk Traders
Those with a middling approach to risk are usually less willing to bide their time waiting for returns than their more conservative counterparts, so they’ll seek to invest in financial instruments that require a more active degree of involvement in the trading arena. If you feel that you fall into this category, investment trusts will usually be the perfect complement for your trading goals, and equity income funds will also tick your boxes.
#3: High Risk Traders
There will also be traders who are willing to gamble all on their investments, and if you have a do or die attitude to most things in life, then you may well be one of them. Those who are comfortable playing with such a degree of risk will be looking to secure dazzling profits, and if the potential for devastating losses goes hand in hand with this, you’ll happily shrug it off as you roll the dice. Luckily, there are lots of markets to cater to your libertine sensibilities. Spread betting is probably the best place to start, although the foreign exchange will deliver its fair share of thrills too.
Which category do you fall into?