If you are lucky enough to have any savings stashed at the moment, you’ll know that with the low interest rates around, your hard-earned cash isn’t really going to bring you back a decent return sitting in a savings account.
So, how do you put that money to work, so that it can generate a decent return? Of course, it depends on how much cash you have. If you have a large amount you might consider investing in a small business or buying a property to let out. However, if you have smaller amounts there are still ways you can get a better return than from a simple savings account.
One way is to try your hand at trading online. Although there are no guarantees that you’ll make money this way, if you make considered choices and make use of a trading app, you could gradually roll up the profits you make on a lump sum.
Many people are understandably cautious about getting into trading as they don’t know much about it. But the principle for trading on stocks, shares or commodities is the same as, say, a market trader buying goods at cost and selling them at a profit on his stall. Another example would be a manufacturer producing an item at a lower price than he can sell it for.
For beginner traders, a trading app can be a very useful way to test the waters. For example, if you want to learn how to buy and sell commodities at a profit, there are plenty of trading apps out there that you can download and then run a portfolio in simulation mode. This means that you’re not actually placing any real trades, with real money, but the data ￼￼simulates what would happen. In this way, you can get a feel for how the markets work, without any direct financial risk.
Commodities – such as copper, iron ore, sugar and coffee – form one particular trading market, but there are also many other markets, including the world’s biggest trading market – the foreign exchange market – otherwise known as FOREX. Having a play around with different markets, you may find that you have a natural affinity for one type over another, and choose to specialise.
You can switch to real money trades at any time, but of course, you have to be prepared to lose money as well as make it. So, whenever you are placing real money trades, think seriously about what you’re putting in and whether you can afford to lose that money. Hopefully, there’ll be more times when your decisions result in a profit, but you have to be realistic – no one wins all the time.
Have an experimental period with a small amount of cash and see how you get on. If it goes well, then you can always decide to introduce more cash. If you don’t like it, you may have lost a small amount, but at least you’ll know you’ve tried your hand at trading.