Someone let the Bull loose in the marketplace. Prices have been steadily rising, and you want to cash in on the bullish bonanza. But How?
Buy and Hold. It worked for Warren Buffett, and it can work for you. Invest in strong companies that have consistently increased the dividends they pay over the years. By re-investing your dividends, the money that your money makes, makes more money.
Major corporations have agents that handle these transactions. Computershare is one. Often you can call these agents, and purchase shares in the company directly.
On-line brokerage accounts also have access to these agents. When using an on-line broker to purchase shares, you will usually pay a per transaction fee of about $10 dollars, each trade. That’s $10 dollars to buy, and another $10 dollars to sell. You can help offset this charge by purchasing more shares of the company. For example, if you purchased, and later sold, 10 shares of a company, your per cost average would be $2 dollars per share. Meaning the price of your company has to rise $2 dollars per share, just to break even. If you had purchased 100 shares, however, your per share cost would be only $0.20
Funds. If you’re not sure, or not comfortable, choosing individual companies to invest in, consider a fund of several companies within the same sector. If you are bullish on energy, but weren’t sure if you should invest in an electric, oil, or natural gas company, you could purchase shares in a fund that held companies in all those fields. In this way, you can profit in the bull market, without having to pick a specific company, or companies. Funds often come with loads and fees that are charged regardless of the fund’s profitability, or lack thereof. These fees, can and will erode your capital, and Fee schedules vary from fund to fund. Finally, some funds require you to stay invested for a minimum of a year or more.
More experienced traders may wish to explore options trading. Options are fun, because, you get to tell the world “I told you so”, and that’s always fun. Options allow you to pick a date and price that a stock or fund will reach. If you believe the price of Gold has finished its recent correction, and is again moving up in price, you would be long Gold, and would want to purchase a call. If you believed that Gold will reach 1600 before it’s next correction, and that it would happen by the end of the year, you might purchase a Dec 11 1600 Gold Call Option. If, however, you thought the price would fall, you would be short, and purchasing a put.
Options can be tricky, and are affected by price, volatility and time. Don’t try trading options blindly, with a weak stomach, or a loose grip.
Otherwise, you might get thrown from the bull and trampled.