With the global economy in a state of turmoil and Australia’s place uncertain, knowing how to survive with limited financial resources is an essential survival skill.
With the news constantly updating us about which countries are immune from economic crises and which aren’t, it can be challenging to keep up with all the necessary information to ensure our safety and prepare accordingly. To help, here’s a list of things you need to know to survive your stocks trading journey in Australia in 2022:
Invest in Bitcoins
The demand for bitcoins is constantly increasing, spiralling the currency to new heights every day. On the 16th of November 2016, one bitcoin was worth $977; however, by January 2018, it had risen to an outstanding value of $3,785. If you manage to invest in some, you will have a valuable asset on your hands when trading resumes. Of course, it’s up to you how many bitcoins you choose to purchase; however, only invest what you can afford to lose!
Now that markets have reopened, you can trade through various online exchanges. The most common method is through CFDs (contract for differences), which allow you to buy and sell contracts on a stock instead of shares of a company’s stock. Although the returns are significantly smaller than they were pre-2020, it still allows people with limited capital to begin reinvesting in an industry that promises high rewards when used correctly. Most large financial institutions such as Macquarie and CMC Markets provide their customers access to these exchanges and professional advice.
Invest in growth stocks
The significant advantage of growth stocks is that they tend to grow exponentially over time; Monash IVF Group is one example of a company that would have been a sound investment pre-2020, with an average yearly growth of 8%. Although it’s essential to be selective when investing in these stocks, the high return they offer makes them a solid option.
Invest in smaller companies
While most experts agree that a portfolio of Australian shares will perform better than any other alternative over the next four years, they also recommend diversifying your investments by holding shares from at least 20 different businesses. This way, if one business fails, you won’t lose all of your money.
Invest in the stock market
Of course, one of the most prevalent investing methods in stocks is simply buying shares from a brokerage firm. The significant benefit of these brokers is that they offer an interactive platform for beginners to learn about investing and professional advice from experienced stock traders. Additionally, CommSec and IG offer customers free margin loans, which means you can begin trading with less capital than usual.
Use CFDs to create short positions
CFDs are a good option if you’re looking to make some quick cash on the financial markets but don’t have enough money to make significant investments or believe that certain businesses are overvalued. CFDs (contracts for differences) will allow you to take long and short stock positions. Although this isn’t much different to what you could do pre-2020, it means that you can take advantage of any drops in stock price by creating a “short” position.
Buy blue-chip shares
Although it might sound boring, investing in well-established companies with a history of high dividends is the best way to begin trading. These “blue chip” shares include big banks such as the Commonwealth Bank, Telstra and Westpac. Their steady base lets investors know that they are likely to stay around for a long time, which means that if you do decide to buy some now, then you won’t have to spend any time worrying about whether or not it will go bankrupt.
Invest in small mining companies
It’s been predicted by experts from around the world that 2018 would be a boom year for small mining companies, with many experiencing significant growth over this period. If you manage to invest in some before 2020 while these companies are starting, then their stocks may surge when trading resumes giving you a valuable asset on your hands. Of course, if you’re looking to take on this challenge, then you will have to put in some research first before investing your money.