For decades, investing in the stock market has been one of the finest methods to maximize your money, so can you earn money with stocks in 2023 still so effectively? Several significant investors did this earlier in the 1980s and 1990s. The stock markets have also grown more accessible to small and medium-sized investors in recent years due to the proliferation of online brokers and trading platforms over the last decade. These platforms make it incredibly simple to purchase shares for as little as 50 euros. We may make investments independent of any online browser by using their services. Moreover, we can effortlessly control them from our smartphones owing to their trading applications for Android and iOS, respectively.
Apart from the ease of managing our assets directly from our smartphones, this sort of investment has the basic benefit of providing us with a far larger return than a savings account at any bank. When you consider how easy it is to identify firms whose shares are expanding in value by 50% or more each year, it’s evident that investing in these companies is a terrific way to produce a big return.
It also provides you with the assurance that your money is being invested in the firm or companies of your choosing. This enables you to avoid immoral organizations in which banks invest more often than you would want.
Due to the profits we may get by selling and buying stocks, as well as the independence we acquire from financial institutions, investing on trading platforms such as Plus500 is one of the best ways to manage our funds. Moreover, we can obtain far more value out of them, both short-term and long term, than if we simply kept them in the bank.
What are shares?
Stocks are financial tools that represent a percentage of a company’s ownership. When you buy shares in a firm, such as Tesla or Microsoft, you effectively become a co-owner.
When purchasing shares for a small sum, such as 100, 500, or 1000 euros, it is evident that your involvement in a firm of this size has no actual impact on the general meeting’s decision-making process. Yet, you will share in the company’s earnings and value development in an appropriate proportion, which might result in a big return for you.
Platforms such as Plus500 may help you in a variety of ways. One of the most basic is to purchase stocks on an upswing, wait for their price to climb, and then sell them at a higher price. Your profit is the difference between the bid and the ask.
Several traders generate a substantial monthly income by repeating this method with stocks of other firms. But you may also earn money with stocks by getting company dividends or buying equities through CFDs to profit when their price decreases. In what follows, we’ll take a deeper look at this.
How can you make money from stocks?
There are three major methods to earn money with stocks: purchasing and selling stocks, investing in stock CFDs, and paying dividends. You may use Plus500 to take advantage of these three profitable ways. Each point is explained in turn:
1. Buying and selling stocks
Buying and selling stocks is one of the simplest ways to earn money from them. This is a common strategy for novices as well. Basically, you purchase stocks at a given price and wait for the market to drive that price higher so that you can sell them at a higher price.
Your profit is determined by the difference between the purchase and sale prices. This strategy may be utilized in the short or long term and is repeatable.
More experienced stock market investors generally select stock CFDs to maximize earnings by taking advantage of market volatility. CFDs, in essence, enable you to use your money as collateral to withdraw a larger amount of money from a broker and invest that larger amount. This may be accomplished in two ways.
Leverage occurs when you borrow money from a broker in order to purchase a larger quantity of shares. This occurs when you believe the market will rise. As the stock price rises, you sell the shares, repay the broker’s loan, and retain the profit.
3. Short Selling
Leverage is the inverse of short selling. When you short sell, you are borrowing shares rather than money. If you borrow shares from a broker, sell them and wait for the price to decline. You then repurchase them at a cheaper cost and return them to the broker. You retain the difference between the buy and sell prices while also receiving the money put up as security.
Lastly, there are dividends, which are the smallest but also the least dangerous way to benefit. Dividends are simply the distribution of earnings by a corporation to its shareholders. Some corporations do not pay dividends, although others, such as IBM, do on a regular basis. To benefit from dividends, all you have to do is continue to hold a company’s shares.
The best online stock brokers in comparison
There are numerous platforms where you can purchase shares online, as we mentioned at the outset.
CFDs: Crypto, Indices, Forex, Commodities, Shares, Options, ETFs
No internal deposit fee
• FX • Metals • Indices • Cryptocurrencies • Stocks • Energies
Tight spreads starting from 0.0
Depending on payment method
49 global currency pairs, commodities, index CFDs, stock CFDs, ETFs, metals, commodities, energy
1:1 – 30:1
1000+ financial instruments, including Foreign Exchange, Commodities, Indices, Share CFDs, Cryptos, ETFs, and Bonds
$3 per side for every 100,000 units
70 crypto-pairs, 49 forex pairs (usdzar as well), 5 metals, 26 Indices, 130 stocks, 6 oil and gas, 6 agriculture assets
Spreads from 0.00
3% + inactivity fee
Can you earn money with stocks in the short term or in the long term?
Stock investment may be profitable in both the short and long term, while each approach is unique and may be better suited to specific individuals or stocks of certain firms. Let’s examine the two choices more closely.
Short-term stock investment is often connected with CFDs since this financial mechanism allows for substantially bigger profits on transactions done in a very short period of time. Moreover, CFDs enable you to benefit if the stock price decreases.
For example, if a firm produces negative year-over-year financial performance or makes an unpopular choice, its share price is likely to decline briefly, opening the door to a short strategy. A leverage strategy, on the other hand, may pay off if a firm has great performance or lands a transaction that has a significant influence on its future.
If you lack market knowledge, do not want to take on too much risk, or spend too much time trading, you may just purchase stocks and keep them for the long term. If the firm has a consistent ascent, you might benefit after a few months or years. This is true, for example, of firms like Google and Microsoft. Moreover, if the corporation provides significant dividends, like IBM does, it may provide a strong return.
How Much Should You Invest in Stocks?
The amount of money you may earn by investing in stocks is determined by the profitability of your company on the one hand and the amount of money you put into it on the other. With this in mind, it’s usually wiser to invest greater sums while you can. You can only make very modest gains with very small quantities, which are useless unless you successfully reinvest them again and again.
It is also important to consider how you invest your money in the stock market since not every deal will be beneficial. As a result, it is critical to manage your wealth in a manner that optimizes earnings while minimizing losses.
One method is to develop a diverse portfolio, such as investing EUR 100 in ten different firms rather than EUR 1000 in a single company. If one of the firms in which you have invested loses value, the others will compensate and drive it upward.
Can you make money quickly with stocks?
While each method is distinct and has various parameters, the attachment age in stocks is a terrific technique to earn money in both the long and short term. Businesses in which you want to invest long term are not the same as companies in which you want to invest short term. Moreover, each market is distinct.
Investing in more volatile stocks is probably preferable during periods of robust bull markets, while investing in stable stocks of dividend-paying companies is preferable during periods of flat markets.
One of the greatest methods to earn money with stocks is to use CFDs, which are trading tools provided by brokers like Plus500 that enable you to make much more successful transactions than you could with your own money. This method allows you to earn money 5, 10, or even 20 times quicker, but it also increases the risk you accept on each transaction proportionally. Nevertheless, Plus500 enables you to create automatic orders, such as stop-loss or take-profit orders, that may effectively limit any losses.
Stock Tips: The best strategies to earn money with stocks for beginners
If you have already chosen to invest in the stock market for the first time, here are some of the most effective stock market methods. You may utilize them to start producing money right away instead of waiting a few months to obtain adequate expertise.
1. Diversify your investments
As previously noted, it is usually preferable to have a diverse portfolio rather than investing in just two or three firms. The reason for this is that businesses might experience losses or enter a slump. These losses can bring down your whole portfolio if you just have stakes in a few firms or a single company.
Alternatively, if you invest in a wider variety of businesses, the positive momentum of the other businesses will lessen the one-time losses of the underperforming ones.
2. Think about the next ten years
Even though corporations like BP are profitable now, it is doubtful that they will be profitable in a few years unless they modify their business strategy. Businesses that dominated the stock markets a few years ago, such as Nokia and Blockbuster, have nearly vanished today because they did not know how to adjust to the changing circumstances.
Renewable energy and the internet economy are the way of the future. That is why investing in firms that are responding to this new technology revolution is a sensible option.
3. Use the automatic commands.
You should not leave starting a trade to chance, particularly when employing risky instruments like as CFDs. Set up automated orders with your broker to liquidate your position as soon as it begins to lose money or reaches a particular profit threshold.
In this manner, you can avoid constantly monitoring the market.
How much money can you make from stocks? Can you live off the earnings?
Of course, the amount of money you may earn each month by investing in stocks is mostly determined by the size of your investment. There are those who can make a livelihood entirely from stock investments, earning significantly more than a typical office job. To generate such an income, however, one must invest a large amount of cash or spend a significant amount of time understanding markets in order to execute extremely effective short-term transactions.
The potential rewards of investing in stocks are substantial, and if you manage your funds well, you may be able to supplement your monthly income, significantly boost your savings, or even support yourself solely from the income generated by the stock market.
Earn money with stocks: our conclusion
The stock market is one of the world’s most lucrative and well-established marketplaces. This is an especially ideal moment to invest in it and make a great return. Businesses like Microsoft, Google, Apple, and Samsung are gradually establishing themselves in the worldwide market as a result of their technical edge and influence, and platforms like Plus500 enable us to invest in them quickly and simply.
In contrast to conventional bank savings accounts, which give a return of about 0.1%, Plus500 enables us to invest in firms that offer returns of 80% or even 100% every year. Some are much higher. We can double our savings in a short amount of time and have much greater control over how we manage our money, which firms we use it for, and when we deposit it into our bank account to recover our gains in this manner.
Don’t be concerned if this is your first time investing in the stock market. Plus500 is a trading platform with over 20 million members that provides a safe and simple trading environment.