Many people know the book investing for dummies; you can view this article as the ultimate, short guide to dummies. In as few words as possible, we try to teach you about the interesting investment opportunities for beginners.
Learning how to invest is important
When you are still a dummy in the field of investing, it is important to first learn how investing works. For this it is wise to first practice a lot through free investment software. After all, it is important not to forget that investing is ultimately a serious matter; a wrong decision can have serious consequences. You can start immediately:
- Use the free investment software
- Open a demo account
- Start with a fictitious amount of 20,000 pounds.
Many people have their doubts about a demo program; however, this is not necessary. Practicing is completely realistic and can also be used to trade with real money. The working method of the demo account therefore fully corresponds to what it is like to invest with real money.
Investing with real money
When you have learned enough, you can easily switch to the real money mode within the software. In real money mode, you can deposit your own money with which it is possible to trade CFDS of stocks and commodities, among other things. You can benefit from the smallest price fluctuations because you can use leverage.
Useful information for dummies
Dummies often do not know how to invest. It is therefore wise to learn first about investing. You can of course do this by reading a book like 'investing for dummies'. However, this book is quite outdated and contains little information about the new possibilities that online investing can offer.
It may therefore be more sensible to first take a course on investing. At trading.info we have several handy sources that you can consult as a dummy; that way you get started with good knowledge!!
- Plus500 tutorial: comprehensive tutorial on how online investing works.
- eBook and digital lesson: read the eBook about investing and get regular emails.
What can dummies invest in?
Derivatives are contracts on, for example, stocks or bonds. This way of investing is especially attractive when you invest with a small amount. An example of a derivative is, for example, the CFD or contract for difference. You can trade these derivatives with an online broker. Read more about derivates here >>
It is also possible to buy stocks. Some dummies may not know what stocks are. Stocks actually give you co-ownership of a company. Stocks can change prices so that you can benefit from price gains. Your stock may also provide a dividend, which is a kind of profit distribution. Read more about buying stocks here >>
If you prefer something a bit tamer, it may be better for you to opt for bonds as a dummy. Bonds have a limited risk, since they take the form of a loan. Bonds have a fixed term within which the price of the bond can change; at the end of the term, however, you will simply get your deposit plus interest back. Read more about bonds here >>
Forex is very suitable for dummies. The price of Forex or currencies often moves less because it is the largest market in the world. Also exchange rates are often easy to understand and you really only need to look at the global trends. This probably makes exchange rates more predictable than, for example, stock prices. Read more about Forex here >>
Commodities are also popular. Today, most people trade in commodities through derivatives; however, it is also possible to physically invest in gold and silver, for example. However, this rule does not apply to raw materials such as sugar and coffee which are usually traded in large quantities. Read more about commodities here >>
Finally, there are options, which are often too complex for most dummies. You can use options for hedging. For example, you can hedge the risks of a physical position if you expect a sudden sharp decline or increase. You can read more about options here >>
A few final remarks for dummies
- Start small: do not immediately begin investing with a large amount!
- Keep learning: always try to discover new techniques.
- Limit your losses: make use of a stop loss order to limit your losses.
- Don’t follow dummies: don’t just follow other dummies; go your own way.