This is a guest post from James. He puts forward some interesting ideas for investing when you have a small amount of money. However, some of the investing choices he offers are considered risky, and involve leverage — which means your losses are magnified as well as your gains. Make sure you are very careful, and do your research, before engaging in any investing activity, especially when it comes to forex and spread betting, since these are actually speculative activities, and not investing in the sense that you “own” anything.
During the current financial turmoil facing the world, people are wondering what, exactly, they can do with their money. Some want to make sure that their savings are simply safe; others want to try and make money whilst the rest of the world wonders what is going to happen next. For those with a smaller budget, it can be difficult to make investment decisions while wondering what to do when the financial systems are creaking from safety to danger day in day out. For those who wish to take advantage of these financial times, but have smaller budgets, here are a few interesting ideas for investment.
Investing in Commodities
Gold has seen a huge rise in its price over the past few years, reaching levels which would have been unprecedented only five or six years ago. People who had strong investments in this commodity prior to the financial collapse of the late 2000s have seen huge returns. Similarly, people who with scrap gold jewelry have seen returns on their forgotten items. Can people with a smaller budget genuinely invest in gold, though? There a various websites that offer people with a smaller budget the chance to buy small amounts of gold and see their investments improve. This means that those with smaller budgets can invest in commodities and make money; the important thing to remember is that this is a real investment. You could make money, but recently commentators have speculated that gold price is going to fall, so it is important that you invest at the correct time.
Editors note: Some point out that silver might be a cheaper way to go. It’s more affordable, and silver often moves in tandem with gold prices. Plus, it’s seen as an industrial metal as well as a precious metal.
Playing the Money Markets
Others might consider different routes for investment, and one could be forex. Making money from the foreign exchange markets can be difficult, and you need to make sure that you do the correct research, but there is no doubt that even those with small budgets can do well. With the right guidance, and determination, you can make money; there are various sites across the net that will give you the guidance that you need to make money even with the smallest budgets. It is important to remember that investing in forex can lead to high fluctuations, be that in profit or loss, so when investing your money you need to be sure what you are doing. On the forex markets you can limit your exposure, so ensure that if you do decide to invest you limit exactly how much you can lose, otherwise you may wake up to a nasty surprise.
Editors note: Many forex dealers/brokers offer free practice accounts to begin with. This can be a good way to get the hang of the platform, and the way it works. There are also offers of “mini” forex accounts which don’t require as large amounts of capital. You can start with as little as $250 in some cases.
A Risky Business?
Finally, people on a smaller budget could consider investing in spread betting. This gives those with a smaller budget the chance to ‘own’ shares that would otherwise be unavailable to their finances. With spread betting you can ‘bet’ on the shares that you believe will increase in value. If you pick the right shares to invest in, then you will make money, much like if you had genuinely bought into the company. This means that for a far smaller outlay you can play the stock market, and profit from ‘investing’ in a company that is doing well. As with any investment it is vital that you take into consideration that the company you decide to spread bet on could lose value on their stocks. This means that you need to make sure you do your research, but if you spread bet on the right stocks then even with a small budget you can make great returns. It is vitally important that you know when to stop!
Editor’s note: Spread betting is illegal in a number of countries, including the United States. This post was written by someone in the U.K., so keep that in mind. If you live in a country where spread betting is illegal, you should not engage in this activity.
This article is written by James who has a strong interest in investing. He has been trying to invest using a small budget, and has tried techniques including spread betting to various levels of success.