So you don’t have a spare million to invest, so the question is if it is at all possible to invest with a small amount. Well, you’re in luck because I have been successfully tinkering with five hundred dollars as an experiment to test whether it is possible and I will show you how.
First of all, you will need patience. You won’t churn out big dollars consistently each month but the upside is that you are actually trading and building an empire…okay, a small empire.
BUT, never underestimate the power of compounding. No matter how you look at it, moving forward is the key.
Just making a two percent profit each transaction and rolling the profit back into the next trade can, over time, make significant strides in building a nice nest-egg for anyone willing to patiently wait out each transaction. Two percent profit each month after two years will give you $788 or even a profit every quarter will give you $574. So how do I do it?
Step one – I only look at the top one hundred stock S&P100 or known as ASX100.
Step two – Pick a stock that has fallen significantly BUT, has previously reached a point that will cover your profit and all other costs like the trading fee. Example below.
You can see that I bought the shares in November 2017 and then sold them in February 2018. The theory behind this is that I have chosen a top company and the second thing is that being a top company I am relying on them correcting their course and returning to previous share outcome. I have seen this done time and time again, however in some cases it may take some time to reach that previous status.
The other thing is that if you have a dedicated bank account that you operate from; make sure it doesn’t have a monthly fee as this could eat away at your profits. Although there may be an opportunity to claim the fee as a tax deduction I would avoid it if possible.
And of course, share trading is a very volatile environment so only use money that you can afford to tuck away for a bit. My trading strategy, like most, is not fool proof but I am willing to wade through the peaks and troughs of each transaction and enjoy the status of trader.