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A Complete Guide for the First Time Investor, Includes Shares, Gold & Forex Trading

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We all look at the stock market and imagine frantic Wall Street brokers trying to make deals. We picture million dollar profits on a Monday, followed by torrential losses on a Tuesday. It paints investing in an exciting, albeit very risky, light. The truth is neither exciting nor hazardous! It is, in fact, a sensible way to build your money over time. Of course, playing the stock market can reap huge rewards, and we’ll look at that in a second. However, speaking to a beginner, our advice is much simpler: play the long game.

Perhaps you’ve built a small pot of cash, and you’re wondering how to turn it into your kids’ tuition fund. Maybe you’ve heard that investing produces more interest than your savings account (it does). Whatever your reason for reading this post and considering investing, it’s all valid. There is no big secret or hidden agenda here. When you invest sensibly, it works.

Today we’ll show you a selection of investment routes you can take as a beginner. We’ll cover the stock market, gold, forex trading and property. Savvy investors always spread their money over a number of investments. As we move through the various options, keep that in mind; you’ll want to invest in a number of them. Let’s get started.

Shares and the Stock Market

Shares are the most common form of investment. It’s what you imagine when you think about investing. At its core, you buy a percentage stake in a company; called shares. It means you now part-own the business. When the company does well, its value goes up, taking the price of your share with it. Congrats, you just earned some money! Naturally, if the company does badly, the share price goes down. The trick is to buy into a company that is strong, stable and planning for the future. Invest in the long term and you’ll ride out any dips in the market.

We’d be remiss if we didn’t explain ‘day-trading’ quickly. Day-trading is what you see on Wolf of Wall Street. It’s the big money stock market game. It involves buying shares quickly, when the price is super low. Brokers will then speculate its rise and fall. They’ll aim to sell when the price is at the top, for a big profit. It’s playing on the little ups and downs, rather than the long upward curve. The rewards are rich if you get it right, but devastating if you get it wrong.

Premium Bonds

Premium bonds are typically known as the ‘safe’ route. They are very reliable and provide immediate income. You’ll be lending money to businesses and governments. You’re the creditor. As a result, you’ll receive interest on your loan every month; giving you a nice trickle of income. The downside is that the income is nowhere near as big as the potential gains in the stock market. However, it does provide a strong, reliable arm in your portfolio.

Mutual Funds

As we touched on in the intro, savvy investment is all about spreading your investments. The best investors have their fingers in many pies. That way, if one industry or investment loses money, the others keep it all afloat. As early investors, we haven’t all got the cash to spread over multiple investments. That’s where mutual funds come in. You’ll pledge a lump sum, or monthly payments, to a financial advisor. He or she will take your money and mix it with cash from other investors like yourself. It becomes a big mutual fund. Your financial advisor will then use their best knowledge to make lucrative investments. They’ll spread the money across a number of sectors and investment routes for safety. It allows you the security and experience of a professional, but unfortunately none of the decision-making.

Gold

Buying gold and silver has long been a profitable investment path. Quite simply, gold will always be cherished and valued. There is a finite amount available in the world, and its reputation alone is enough to hold its value. Investors consider it a stable part of their portfolio. Gold and coin dealers tell us that its one of the few investment economies that survived the recession. It also rode out the stock market dip that followed the 9/11 attacks. Not many investment routes can claim that!

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Property

You don’t need us to tell you there’s plenty of money in property. It’s not quite the lucrative money-maker it was ten years ago, but there are still plenty of opportunities. Much like the stock market, the property market generally follows an upward curve. Ignoring the odd dips in the market, you stand to make a good gain when investing long-term. Buying a home and holding onto it for ten years will see your money increase. Some property investors prefer a more active approach. They’ll rent the property to tenants, or refurbish the house and sell it for a higher price. There are many different ways to make money here!

Forex Trading

Most people have heard of forex trading but aren’t exactly sure what it is. It is investing in currency. When you go on holiday, you’ll exchange your money for the native currency. You’ll notice that the rates are constantly changing. One day you’ll get a great deal, the next, it costs a fortune. That’s because exchange rates fluctuate with the market. With forex trading, you’ll buy lots of currencies when the exchange rates are low. Then you’ll convert it back when the rate is high. When you start adding in lots of different currencies, it gets complicated but lucrative!

Yourself, or a Friend’s Business

Sometimes, there’s no better place to invest than in yourself. If you’ve got a fantastic business idea, give yourself the freedom to see it to fruition. Build an empire and take control of your money. Perhaps a friend has a business that is doing well, ask about investing or buying a stake. It will keep your cash close to home, and you’ll retain some control.

We hope this introduction to investing has given you a brief outline of the opportunities available. If you want to get deeper into each section, there are plenty of resources on our site. Get stuck in, and good luck with your future investments!

About Stephanie

Stephanie Rosen is a financial market analyst and a blogger. She writes about stock market and investment opportunities around the world. You can find her latest ideas on here. Just signup our news letter today and receive regular updates of Stephanie.