Trading Tips For The Beginner

By • Apr 5th, 2013 • Category: Investments

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If you spend a bit of time checking out the share prices on a regular basis, have you ever felt like having a ‘dabble’ yourself? It is not for everyone but there seem to be a lot of people making some decent money out of these activities. Perhaps you are tempted but are too conservative to invest a large amount of money, because after all it took you a long time to earn that wedge. This article looks at some ways to dip your toes into the financial swimming pool known as the stock exchange, without losing your worldly possessions.

Before We Begin

First of all, you have to be comfortable with the fact that you may well lose some, if not all, of your investment capital. If you can live happily without this money, then you are ready to proceed. But if you had this money stashed away for next year’s holiday, it is probably best to scrap your ideas of world domination for now.

Okay – Let’s Go!

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For your first foray into the financial jungle, you could do worse than beginning with a fund investment. This will spread your risk and allow you to have a small stake in some of the top 150 companies.  You should also ensure that you use any tax fee allowance that may be available to the individual. This varies with each country and you should check with your tax office for some specific advice. If you use this allowance wisely you can avoid paying capital gains tax, and nobody enjoys that particular activity.

Spread Betting

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You can use your investment money to split between the three main risk categories:

  • High Risk
  • Medium Risk
  • Low Risk

Be careful not to choose your company options based on their track record, the market may have had a different set of influences at that time. You can go online and find out some impartial tips from the experts. Just be aware that you may be reading advice from somebody with an interest in one of their tips. If you stay with the bigger websites you will probably reduce that risk significantly.

Financial Advisers

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These are very helpful people when it comes to advising novice investors about their options. They will explain the risks far better than any website will do, and you need to be upfront about your finances and your limitations. They may offer you some different choices when it comes to investment options. There are some schemes that allow you to make a regular deposit into a fund, and this might suit the more conservative investor.

Tracker Investments

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This is an interesting investment option that allows you to invest in the growth and loss of the top 100 companies in the FTSE. This is a passive investment option and will only follow the index, and it will not suit the investor who relishes the idea of controlling their investment choice.

Do Your Own Research

There are many websites and blogs online that will offer you endless advice on how to make your first million or billion. Be aware that some of these are self-serving and enjoy fooling first time investors into losing their money. The only way to get impartial advice and accurate information is to source these details yourself. Take any piece of advice with a pinch of salt, and just remember that your investment can go down as well as up – Good Luck!

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Author Bio: Tom Coleman is a financial adviser based in Sydney and an avid blogger. He says that investing in financial markets is about taking calculated risks. He recommends using a reputable SMSF software that helps investors manage their portfolio in a better way.

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