[mage lang="" source="flickr"]undervalued penny stock[/mage]
Whats better, investing or trading on the stock market? Which has the greater probabilty of winning?
I am 18 years old and I want to choose out of the investing or trading of stocks to make money for future business founding capital.
I personally think that trading tends to be more like margin based investing such as CFDs or spread betting, in which I have tried both in practice accounts but lost most of the time, especially with spread betting. I do, however, believe in the idea of value investing of stocks by directly purchasing stocks that are undervalued or stocks with high growth potential, (not penny shares!), What would you recommend is best in your opinion out of trading stocks or directly investing into stocks for high growth? What would you do? Please answer for best, best answer. Thanks.
Trading options, CFDS, futures, spread betting or any margin trading for that matter is risky. Additionally CFDs and options are leveraged products which means that you only need to deposit a small amount of the position outlay – this can potentially multiply profits but also losses. Trying to play with a small amount and using gearing at its maximum level is like playing russian roulette. Having said that with prudent trading it is very well possible to make a good income from stock market trading (I’m successful myself). If you’re just starting out it would be best to first buy shares using a traditional broker and as you mentioned you would do well to steer clear of penny shares.
Your best bet at 18 is probably to get a good education which will provide you with a solid foundation to build on in future…
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