Ask Away Blog: Pocket Pouch: What To Do With That Little Extra?

Pocket Pouch: What To Do With That Little Extra?

Thursday, January 17, 2019


You’ve done your taxes, you went on holiday, you put some away into your savings account ready for retirement, but you still have just a little left over. What to do with that wad of cash? You’ve already done what you needed to so now it's time to see if you can make that wad into two wads. Firstly in order to make sure you stand a good chance of making money, you need to let go of your fear of losing it. If you think with your heart instead of your head, you’re counteracting what your motives are in the first place; which is to make money! So what should you do with that little pocket pouch you have created?






Spread it all around

Something that is causing a lot of debate in the financial world is whether or not stock trading is being usurped by incides? Well, it seems like the risk is far lower but the ability to make a consistent profit if high. The only thing that doesn’t make index funds the giants of the investment world is that the profits aren’t that large in comparison to other forms of trading. However, you can take $1,000 and spread it all around in an index fund. You have a vested interest in lots of different stocks. If one falls, another might rise to compensate. You end up making a profit one way or the other even if it's small. So you should consider finding a small investment firm that does have a portfolio of indices that you can invest in. Some index funds are industry specific while others are more so randomized.





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Watching it happen

If you want to make a small investment and watch it become a highly profitable stock, then you should consider swing trading. You won’t be holding any kind of position for long, but you won’t be so quickly in and out as you would be in day trading. Swing trading is simply like a shortened version of a long term position, only you are investing in a stock that for the foreseeable future is on the up and up. To understand the concept, look at the best indicators for swing trading with a professional software to help you. You’ll see some stocks not performing as expected but other will so exactly what a stock for a swing trader must do. It gradually climbs higher and higher until it achieves a short term peak. This usually occurs when a company is going through an expansion. There’s a lot of interest in said company but eventually things calm down and it's back to normal again. But in that space of time when there is a buzzing interest, that’s when you as a swing trader should make your move.

When you have just a little extra and you don’t want to do what you normally do with it, then consider making a profit with that small wad. Index funds spread the risk around and almost always turn a profit. Swing trading takes a little learning but there are an array of software to help you.


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