How do you make money investing in a stock market that falls over 600 Dow points and then gains most of them back all in a matter of minutes, as in early May of 2010? Where do you invest money when uncertainty is running high? Even average investors can make money investing online in a simple brokerage account IF they know their investment options. I’ll show you how.
Average investors used to be limited when it came to investing money. Mostly they just played the stock market through their brokerage account, buying and selling individual stocks, like GE or Ford or perhaps some penny stocks. In a volatile and/or declining stock market they lost money, because other investment options evaded them… were too complicated, and the domain of the rich and financially sophisticated. Today, by simply investing online in a discount brokerage account, you can make money investing in all kinds of investment options by simply buying and selling the right stocks.
These stocks are called ETFs (exchange traded funds), and they trade just like other stocks on major exchanges. With a major discount broker, investing online can cost $10 or less per trade, and your BUY or SELL market order is executed in a matter of a few seconds. So, what’s so great about these ETF investment options, and how do you make money investing online in them? Let’s talk about early May, 2010. The stock market had been up for over a year, with very little volatility. The economy was picking up and the financial crisis was old news… until Europe took center stage with debt problems.
Now, the question is where to invest money to both protect your recent stock market profits and to make money investing if the world economic news continues to worsen. The following are all stocks (ETFs), and are presented as examples of investment options available by simply investing online in a brokerage account. The truth is that I personally did invest money in these ETFs recently in search of alternative investment options… in case the stock market gets into trouble.
Stock symbol VXX is simply a bet on volatility: that stock prices will fluctuate more in the future. Big daily moves, both up and down, and you make money investing here. TBT is a bet that long term interest rates will go up. FAZ goes up in price when financial stocks fall, SDS goes up when the stock market in general falls, and TZA flies when small stocks take a beating. If you think that natural gas, which has gotten cheap, will go up in price you can buy UNG and go along for the ride.
All of the above investment options may not be profitable at the same time, but look at it this way: how will you make money investing if the stock market goes sour again? With interest rates at or near record lows, the money market and bonds are not real attractive investment options. When in doubt, diversify into other alternative investments like the big investors do. Now you can too, without leaving the stock market, by investing online in ETFs in your brokerage account. And remember this. If you buy a stock and it goes against you… you can almost always sell it off inside a couple of moments when investing online.