4 Trading Ideas For Supplemental Business Income
More women should participate in the world of trading. FCA research shows that fewer women hold investment products than men. The percentage of UK women that have traded equities and shares is only 17%, while the percentage of UK men that have traded equities and shares is 26%. When women diversify their income sources through methods like trading, they have more protection against unexpected events. To help, we’ve listed a few markets worth considering.
Foreign Exchange
The currency trade is the largest and most liquid financial market in the world. Previously exclusive to institutional investors, foreign exchange trading gained significant traction among retail traders when technology made trading more accessible. A look at Trading Station on FXCM shows that modern forex trading platforms include features that help users make smarter trading decisions. Integrated news and economic calendars keep traders updated on key events, while education and research tools give traders access to expert insights.
Forex is a good trading option for women with lower starting capital. Many forex brokers offer leverage programs, which allow traders to take positions using borrowed capital. It’s important to note that using leverage is risky because you will have to account for both the amount you borrowed and your losses should you choose the wrong position.
Stocks
For long-term investors, stocks have always been rather reliable. Dividend stocks give investors steady income by dolling out fractions of company profits. And as long as a company performs well, stocks can easily navigate the market’s ups and downs and give investors a decent return on investment.
Holding and trading stocks after a short investment period can also be a great way for women to make money. And just like forex, the increased availability of online trading platforms makes stock trading more accessible to the average investor. The FCA-regulated broker Trading 212 lets investors trade stocks and other investment products commission-free, making trading more affordable. Through Trading 212, investors can also buy ETFs, CFDs, forex, and derivatives.
Exchange-Traded Funds
Though stocks are usually reliable, staking capital on individual companies can be risky. Investing in multiple stocks is always an option, but this strategy requires a lot of research. Women that want to keep risk low without having to keep track of too many stocks can consider investing in exchange-traded funds (ETFs).
ETFs are a type of mutual fund — and mutual funds are pools of actively managed stocks (and other securities). However, ETFs differ from regular mutual funds in that they can be bought and sold multiple times throughout the trading day, similar to stocks. Because ETFs contain a basket of pre-selected securities, they take the guesswork out of diversification.
REITs
Real estate investment trusts (REITs) are similar to ETFs, except that they pool income from real estate investors rather than companies. A guide to REITs from the HM Revenue & Customs notes that buying REITs allows investors to generate similar returns to direct property investment. Income from REITs usually comes from rental income or mortgage payments.
Although REITs are easy to liquidate, experts recommend holding them over a long period of time rather than trading them actively. With longer investment horizons, REITs have more time to grow and dole out dividends.
Women are just as capable of thriving in the trading world as men. By expanding your income-earning capacity, you can boost your ability to stand on your own financially. If you're also looking for suggestions for career paths you can take to support yourself, you can look into our article on ‘Fantastic Career Choices for Women Who Want to Stay on Their Feet’.
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Jana Cruz is an aspiring freelance writer with a passion for personal finance. In her spare time, she enjoys oil painting, cycling, and taking care of her Yorkshire Terrier.
