1- unit trust/ mutual funds
2- stocks & shares
3- stock options
4- forex
I believe investments are categorise into 2 groups, paper assets and real assets. Paper refer to the above and more. Real asset are real estate properties.
It is essential to have both if you want to be a full time investor.
I personally trade forex as income gaining for my adventures in real estate. thats my choice, whats yours?
back to why trade forex.
i started off paper trading with unit trust/mutual funds. They are the easiest to start off with. and most layman out there enter into such funds without actual knowledge of what the funds is into – which industry, sector, company etc.
In a nut shell, you have absolute no control over your funds and how much return you will be getting in a year. And you pay high management fees to the fund manager and commission to the broker/agent.
I personally do not like trading things without my control. Can we control how much we make in unit trust? and all those talk about diversification? is that actually useful there? is diversification considered control over your money you put in? i seriously doubt so.
Next will be stock and shares. They are not bad, warren buffet and many investors made it real big using that. However, they are for the long run. Real long run.. years.. and to earn a mere percentage in years will not make me rich starting from a low capital. Dividends are good, but are they substantial enough for you to earn a living through that? will that make you rich in the time span you want?
Options trading. you are leveraging a small amount to buy/sell an option of the share you want. And there is a time frame for it before it expires. However, before expiry, like every stock and share. You have to look into the factor of the economy as a whole, and then the company of your stock. Can we control either of both? and in the limited time frame before expiry? and options dislike people whom day trades. They have a clause for it and you must have a sum of money with the broker held there before you are allow to day trade. and commissions for every trade you enter and exit. whats left?
However with all being said earlier, there are really people who make it big and financially free with the instruments above. They are only opinions of mine.
Why Forex? Forex is the largest trading market in the world. with trillions of dollars in the market daily.
you have control over your money.
you can leverage with a small capital
you can day trade
its a 24hr market
no commission
However with that all being said, forex is also very risky. which is why 95% of all traders lose their money.
You need to learn how to trade before trading forex. or else. its a 100% failure.
I have trained a good number of students to date whom has seen consistent success, majority have quit their jobs to be full time traders now.
However if you are thinking full time traders equals to looking at your computer the whole day. No way.
we all have a life. however it can be boring at times as most of your friends out their are working their full time job and you have no one to enjoy with.
Thats a choice.
Alright, i apologise for my bad english phrasing above and my thoughts are scatterd as i write this post. Just my humble opinion from someone whom has tried the above paper investment vehicles.
Ezekiel