The market is a wild place. I love it. Whether you’re trading blue-chip stocks on NYSE, tech stocks on Nasdaq or microcap on AMEX, there’s always profit to be had. Even when the market is down, there are still ways to make money.
Here are two quick stock market tips for you that I picked up from a great financial investing blog. Hope you like them.
1. Know the Spread
Do you know what a “spread” is? If you buy stocks online, you can head to your broker right now and to pull up a quote on your favorite stock. See the ask price and bid price? The difference is called the spread. You need to know it, because it’s like a built-in “loss” when you buy the stock.
For instance, if the stock has a $10 bid price and a $10.50 ask price, the spread is $0.50, which means if you buy this stock, you need it to increase 50 cents to break even.
2. Explore Exchange Traded Funds
ETFs are a great way to get a basket of stock without managing it all yourself. For example, if you’re into gold investing, you could go out and buy gold bullion or you could just buy shares of an ETF for gold investing (like GLD).
They work just like stocks and they’re a great way to diversify your portfolio.
There are exchange traded funds for everything you can imagine.