How Much Money Can I Make Trading Stocks Or In Online Trading?
Over the past ten years since Ive been playing the stock market
, I always get asked by people what is the quickest way to make money in the stock market. Is it by finding a good company stock and buying low and then selling high? Or maybe it is finding some good news about a specific company and buying before the stock price goes higher? How bout finding a company stock or sector that is performing very poorly but it hasnt been reflected in the stock price? What I am referring to is betting the stock price will go down and profiting from it. You might ask yourself, how is that possible? Most people believe they can only make money when the stock market goes up but I am going to introduce you a concept called short selling.
Short selling is a key component of most hedge fund managers and involves the borrowing and selling of a stock that the investor doesnt own in anticipation of buying it back at a lower price in the future. Therefore, investors attempt to profit from a decline in a companys stock price. Collectively, a short stock portfolio can profit from a stock market decline and thereby act as a portfolio hedge to long positions that would likely decline during a stock market correction. As well, investors can short company stocks and profit from their decline based on poor company fundamentals. These factors can include poor management, overvaluation and declining revenues. During the financial crisis in late 2008 and early 2009, many investors saw their stock market portfolio decline rapidly. In fact, so many people lost money in the stock market that they never invested in the stock market again. However, there were other investors who generated huge returns during this period of time.