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Please take note that this is part one of a three part article series. Do read all three articles to gain an insight on this strategy and the way to utilize it fully.

There are numerous solutions to generate profits in stocks and shares, even for stock market rookies. Besides the traditional method of getting profits through going long or selling high and backing back low, we are going to be contemplating another approach to getting semi-passive profits through the stock market which doesn’t need a lot of work. However, there is a catch 22 situation here: for anyone who is willing to work harder, the more you may earn over the long run with this approach.

One of the more standard and no-fuss methods to earn a passive income while in the stock market is to purchase high dividend stocks. Look for listed firms which might stand the test of time, are doing very well and pay a ample dividend (minimum of 4%). Another technique is usually to search for firms that do business in commodities e.g. mining, oil and agricultural. A few of them pay well to their shareholders, particularly if their results are superb as a result of high costs of the commodities they are dealing in. Whenever you possess dividend stocks, the stock price is normally not the principle factor as you’re looking out for respectable payouts for those holdings you keep. REITs (Real Estate Investment Trust) are also a good way of utilizing the dividend approach to achieve passive earnings.

Do take note that there are hazards implicated in using this strategy of receiving passive takings. There exists a chance the share price might go down in bear markets or corrections and won’t go back to the purchase price you obtained the shares for in the very first place. This may signify that you’d have lost your hard-earned wealth as opposed to receiving passive income. Another option is that stock markets break down before economies do and almost all corporations will perform poorly in a recession. When their revenue are affected, they have an inclination to remove their payouts and this can lead to a loss of your passive profits. In the latest market mayhem, many good corporations actually decrease or withdraw their dividends and payouts, upsetting lots of people as they relied on it to survive.

It is possible to still make use of the dividend tactic and to remove the risks concerned, thus setting up a win-win situation for us. Before we go into it, it is very important examine the first stratagem along with the profiles of those that are appropriate to utilize it. Buying dividend shares is a fuss free method of getting passive income for the next kinds of people:

1) the Baby Boomers who’re retiring in a little while and can survive off the payouts,

2) people busy with work and other things with little time for reading up on stock picking competencies but aspire to obtain steady passive income for the rest of their existence,

3) people with a long-term views, say 10 years roughly,

How is it doable to reduce the risks and augment the potential profit of shopping for dividend holdings? To be able to accomplish it, you will need to time the stock market to identify uptrends and downtrends. It is imperative that some education in stock market essence for freshmen is considered necessary. Once you are able to recognize movements in the stock market indexes, it is way easier to ramp up your yearly gains in the stock market, thus making you rich far more rapidly than pure dividend share holders.

Prior to reading Parts II and III of this installments, one must always do these:

1) read Part I above and understand the opening to this plan, 2) follow the link above to possess a plan on how to time the stock market (do visit the blog for stock market for beginners), 3) have a general feel of the economy; how it is doing, whether there is there a harsh downturn in place (like what has happened in the last 2-3 years is considered pretty severe, 4) have a overall idea of the basics of a business you have an interest in as a stock pick (check out the link offered)

With all these completed, you are now ready to read up on Parts II and III and can have a full image of how it works and also why it trumps pure dividend plays. This will be shown to you in the other articles on Parts II and III of how one can earn semi-passive income from the stock market.

Bernard J Dreyfus shares his experience and insight to novices in the stock market who wish to study stock investing as a skill and make money persistently as he knows that any investor must study the time tested fundmentals of the stock market to become great. Also published at Part I Of Learn How To Earn Semi-passive Proceeds Through The Stock Market.

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