When investing online, there are a number of reliable avenues to make a good profit whilst minimising your risk:
1. Trading Stocks
Stock trading is one of the most traditional investment techniques where you can minimise your level of risk. To do this you should invest in a diverse portfolio of stocks ranging from small-cap to multinational companies. A good rule of thumb when starting out is to only invest in companies who consistently perform well over a number of years – this is much more reliable than looking at the number of months.
You should open trading account with a reliable broker to ensure that you are not charged any hidden fees or commissions. Carefully monitor the market trends and devise a clear investment strategy before purchasing any stocks. You should also watch the financial reports of the company and evaluate its profitability before buying stocks of that company.
For more investment tips, be sure to read the Naked Trader by Robbie Burns – you can see my review of his book here.
2. Forex Currency Trading
Another approach is to trade Forex currency pairs. In order to trade Forex currencies, you’ll need to open a trading account with a regulated Forex broker. Forex trading requires smaller investment and can often deliver high profits.
You can open a trading account with any broker with minimum deposit of just £300. Once you understand the market trends and price movement of various currency pairs, you can make money by following the right trading strategies.
Forex trading is the biggest financial market with £3.3 billion worth of transactions happening on daily basis. Also you can make use of leveraging options in Forex trading with maximum of 200:1 ratio depending on your broker.
3. Investing in Mutual Funds
Mutual funds are collective investment funds, managed by professionals who pool money from various investors to buy securities. Mutual funds are diversified as they invest in large number of securities like government bonds, stocks, commodities like Gold and silver etc. As your investments are diversified in this way, you minimize the risk when one avenue takes an unexpected tumble.
Mutual funds can also be of different categories such as unit investment trusts, close-end funds, open-end funds etc. Hence mutual funds are always a good option to gain high profits with relatively low risk. Some mutual funds will promise aggressive growth by investing in rapidly growing stocks so as to generate huge profits in short term.
Mutual funds also require very little management from the investor so are a good option for those short on time who are not able to keep a watchful eye on the market.
4. Investing in Binary Options
Binary Options are the recent techniques of investment with which you can generate huge profits with very low risk. Binary options are called so because they can result in only 2 possible outcomes, either the trader wins and makes as high as 85% returns on his investment or he loses the trade and all the money he had invested for that particular trade.
Binary options involve speculating the price movement of various underlying assets like stocks, commodities, Forex currency pairs and Indices. T
he first step for investing in binary options is opening a trading account with reliable broker. You should make sure you choose the right broker who is legitimate and does not charge any hidden fee. Once you open the trading account, you can choose the underlying assets depending on your market knowledge and experience.
You should decide the Strike Price and Expiry time for the particular asset and place the trade. If the asset reaches the strike price before expiry time, you will win that trade and make as high as 85% profits on your investment. Hence binary options are considered as an easy method to make money with relatively low risk when compared to stocks.