What do we do with the money we don’t use? Usually, there are several popular options, that people use: extra shopping, pig bank, or bank deposit. But there is a professional thief, from which none of the listed methods of storage will protect from – inflation. For the money not to lose its value and bring income, it must constantly work.
An excellent tool for this is investments. It is possible to make millions on the stock exchange, as well as to lose them all. Initially, the meaning of investment is the following – it is a way of giving up the capital for its further multiplication. But not everyone gets it right. Let’s understand how much money you need to start investing, how to choose a broker, and if there is a guaranteed way to get rich trading on the stock exchange. We will also take a closer look at indices investment because indices are very popular assets along with currency trading.
Why Invest and Is It Right for You?
Let’s say you have a deposit in the bank or dollars under your pillow, but you are not satisfied with the interest, or you are afraid that the money can be stolen. You want to earn more and multiply your money, which is understandable. At this point you have to understand: the higher the opportunity to earn, the higher the probability of losing all the money. If you are aware of the risks, and you have some spare cash, it might be worth learning to invest in indices, which can be easily traded on the stock exchange.
Basic Information about Indices Trading
In addition to being able to trade a company’s stock, you can also trade what is called an index, buying and selling it just like an individual stock.
An index consists of a group of companies, and its price is based on the average price of the entire group. You’ve probably seen stock index names like the DAX 30, the FTSE 100, or the NASDAQ 100 in the news. For example, the German DAX 30 index, measures the performance of 30 leading German companies, and the NASDAQ 100 index measures the performance of a group of American companies, mostly in the technology sector. Index trading become increasingly popular and started to be a part of everyday language in investing.
How to Trade Indices Online?
Indexes are purely nominal instruments, so the only way to trade them is to trade products that reflect their performance. Such products include futures, exchange-traded funds (ETFs), contracts for difference (CFD), and index funds.