Several years ago we witnessed number of very discouraging articles about Generation Y being damned to life in constant economic crises and to big unemployment figures. Surviving the crash of housing market from 2006 to 2008, number of experts thought that people born from 1982 to 2000 will tackle financial difficulties throughout their whole lifetime. But the Millennials didn’t surrender so easy. Instead crying over the hardships they meet in everyday life, they decided to take matters in their own hands, and open thousands of small startup companies. Soon most of the pessimists needed to admit they were wrong, since American stock markets are hitting their record high since 2008 and unemployment fell to only 5,5%. Since growing economy is one of the best environments to invest and these times look like the new Dot-com bubble, Millennials have a good chance to completely dominate the stock market, but there are some simple advices and techniques that can be very useful.
Portfolio Diversification Technique
This technique allows investors to “play it safe”. It means that money should be invested in many different assets. This includes several opposing companies on stock market as well as in bonds, real estate and even cash if it’s necessary. Another way of diversification when dealing with stock market only is investing in ETFs. These are funds that contain several value assets whose ownership is divided in shares.
Value of Real-Time Information
When trading stocks you need to be online 24/7. Lot of people can’t cope with the pressure and they decide to quit easily. Traders need to get regular live quote information at any time. That’s why real-time trader workstations like Equity Feed are so popular these days. This software offers personal alerts that give all the information about certain stock’s important events.
Dollar Cost Averaging Technique
New Dot-com bubble raised concerns among experts that this stock market growth can end up in a big burst. With Facebook having a greater stock market value than Ford, it is hard to predict the future market trends. That’s why dollar cost averaging technique can be very useful in securing investments by separating funds into smaller monthly investments. This way investor is securing the year-average stock price for invested funds.
Socially Responsible Investments
These investments have been very popular in last few years, and there are many good reasons for that. People like supporting their causes while doing business, and that’s why more traders invest in sustainable companies that create clean energy sources. This type of business is often subsidized by the government which gives it more chances to succeed.
Importance of Good Exit Strategy
Complex defense layers and a good exit strategy are the essentials for making a successful business at the stock market. Trailing stop strategy has been one of the best possible exit plans that can save investments from sudden stock or market crashes. If the strategy works on 25% trailing stop order, it means that from the moment trader buys the stock he/she needs to wait until its value falls for 25% from its highest and then sell it. This way traders who use it never wait until stocks they bought hit rock bottom. It is another proof on the importance of real-time information and good trader software. But let’s hope that sudden market crashes are the thing of the past.