The Best Markets for First Time Investors - by Tom Matthews

Wednesday, 25 May 2016
Investing your hard earned money in something other than a regular bank account for the first time can be an exciting move. On the other hand it can be a little worrying if you’ve never taken such a risk with your finances before.

There are many options for what first time investors can do with their money, with a number of different markets that offer trading and investment opportunities to make a profit. If you’re considering making some money on the side through investment then read on to decide which market to tackle first.

Stocks and Shares

Buying stocks and shares is one of the most common ways that people start investing. This is because there is so much choice of stocks and shares to invest in and it often appears to just be a simple process of buying low and selling high to make a profit. It allows for diversification as you can spread out investments across a number of different products, reducing the risk of losing it all in one go. As a new investor there are many ways to learn the trade.

Forex Trading

Trading currencies on the forex market is a more complicated activity for first time investors, but still offers plenty of benefits. You will need to do plenty of reading into it and practise through using forex demo accounts before putting your money on the line for real. Still, by simply trading one currency pair, making the most of leverage and stop losses should reduce the chance of first time traders losing too much too soon.

Commodities

Commodities are another large market with many investment opportunities; from crude oil and natural gas to everyday items like meat, wheat and sugar. Beginners need a decent knowledge of commodity futures and options markets as well as historic price analysis to ensure they make the wisest trading choices. Being aware of global and financial news that will affect commodity price for short-term trading is essential too.

Precious Metals

Investing in gold (and silver) is viewed as one of the safest investments, used as a way to protect wealth. Gold especially is used in a number of applications and, along with silver, required for industrial use as well as for jewellery and other purposes. This ensures there is always a demand, so for new investors they would be unlucky to lose money buying gold.

None of these forms of investment has any guarantee that you will make a profit. You could lose some or all of your investment. Get armed with some detailed knowledge of how the markets work before you jump in, and only invest money you can afford to lose. Consider how much risk you are willing to take, time and finances to invest and pick the right market for you.