Financial

With the sting of the global recession still fresh, people have begun to look for different ways to use their money. Investing has always been a great way to supplement your income, given the right mindset and some due diligence. The opportunity to make a living off your investment portfolio is worth considering, especially since you can now do it easily online, and therefore from the comfort of your own home. Here are some tips and information to help navigate through the risks and thrills of living through investments.

What to invest in

When people say investments, they usually mean one of three things:

Stock A piece of ownership into a corporation that represents a claim on part of that corporation’s assets and earnings (Historical rate of return at 7-10%)

Bond An investor loans money to an entity at a fixed interest rate to be repaid at a later date (Current rate of return at 1.38)

Mutual Fund A portfolio consisting of stocks, bonds and other assets operated by a money manager who invests on behalf of the fund’s investors.

Along with these types of investments, there are a multitude of other online investment opportunities to add to your portfolio. Crowdfunding, for instance, has become popular due to higher rates of return while contributing to an entrepreneurial cause.

Where to invest

Before you look into how to buy shares with brokers like Interactive Investor, you need to understand the basics of the stock market. When people talk about the market, they are really referring to an index. An index is an imaginary portfolio, consisting of various securities and stocks that indicate how well a particular market is doing. The three most common stock indexes in the U.S. are the Dow Jones Industrial Average, S&P 500, and the Nasdaq composite.

The DJIA represents around a quarter of the value of the U.S. stock market and includes around 30 of the world’s largest companies. It is a price weighted index, meaning it’s computed by adding up the per-share price of the stocks of each company and dividing this by the number of companies.

The S&P 500 is a larger and more diverse index than the Dow. Like its namesake, it holds 500 of America’s most widely traded stocks. As opposed to the Dow, the S&P 500 holds around 70% of the total value of U.S. stock markets. It is a market weighted index, meaning every stock in the index is represented in proportion to it’s market cap. This allows changes to be measured in percentage amounts, rather than dollars.

The Nasdaq is best-known for its technology trading. While having most of the technology stock, it also includes speculative stocks as well.

Start trading

In order to begin trading, you will need a stock brokerage account. There are now many options online, and it’s a constantly shifting sector but you can check broker websites for user reviews before you make a decision.

Start by choosing a small mixture of stocks. While diversifying means that the opportunity for high rates of return goes down, you are not as susceptible to the volatility of the market. By spreading the weight of your money between different companies, you are putting together a mutual fund of your own and exercising more caution with regards to your money.

If you’re new to the game, it’s often a good idea to stick to a number of company names you know and/or trust. Moreover, mix shares with fixed-income options, such as bonds, and this allows you to lessen the ‘unknown’ factor and guarantee yourself some sort of return, albeit at a lower rate.

As with anything else worth doing, time and effort are key in making a living off your investment portfolio. If you are willing to take some chances with the marketplace, as well as safeguard yourself, then the opportunity to live off your investments could well be waiting for you.

The American economy has delivered some conflicting data sets in recent times, as financial market growth has conflicted with fluctuating levels of unemployment, job creation and consumer confidence. This is a trend that has been prominent across several nations, as the global economy has teetered on the brink between recession and sustainable economic recovery.

With the second financial quarter of 2013 now firmly underway, however, there are signs that global economic growth is now far more robust and consistent. This means that both economies and the financial markets are experiencing universal prosperity, triggering improved sentiment among business owners, consumers and traders.

How America Remains at the Heart of Global Economic Growth

The recent economic outlook supported this assertion, with markets rising on Monday after significant gains were made by the American economy. The most recent support of growth was triggered by an extremely optimistic U.S. jobs report, which gave weight to the suggestion that the global recovery may be gathering momentum. This information is also supported by this survey that offers a statistical analysis on employee retention rates. Both the U.S. Dollar (USD) and stocks subsequently soared to new highs on Friday, after unemployment fell to just 7.5% and achieved its lowest level since the distant summer of 2008.

The impact of this was felt globally, as the Asia-Pacific markets also soared to considerable heights. Hong Kong rose by 1.02% during afternoon trade of Friday, for example, while Shanghai advanced by a further 1.13%. Sydney also followed suit, while Malaysian shares soared by a staggering 7.76% to achieve a record high of 1,823 points. When you consider that both the Dow Jones Industrial Average and S&P 500 have both had the distinction of breaking similar national records in recent times, then you begin to understand the importance of sustainable economic growth.

Even European nations seem to be displaying more positive signs, with the UK having recently avoided the threat of an unprecedented triple-dip recession. This came as a considerable surprise to economists, who had questioned the governments austerity measures and forecast a prolonged period of recession for the island nation. With the British economy growing tentatively and the nations level of borrowing having fallen for the first time since the beginning of the recession, it seems as though America remains influential in terms of dictating the terms of global economic development. 

While stocks have soared considerably in the wake of American economic expansion, however, those involved with forex trading can also look forward to greater levels of prosperity. Whilst the USD remains the most popular influential currency in the world, it must also be remembered that a positive sentiment makes it far easier for traders to identify trends associated with the market and wider economy. As a result, economists are beginning to predict a cycle of growth and development that can impact on countries throughout the world.

Despite the recent economic uncertainty that has undermined the prospects of a global recovery, America appears to be leading the way towards more sustainable growth. This is also impacting heavily on the financial markets of the world, especially those that deal in stock equities and international currency pairs in the far East. So long as the U.S. economy can sustain its current level of momentum, there is every chance that the ghosts of the global recession may be finally laid to rest.