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How to make easy money? #finance #investments

The Bank of England left interest rates at 0.5% yesterday which was good news for people with mortgages but bad news for savers. This week, stock markets fell all around the world and President Trump’s bragging about how well the US stock market was doing came to an abrupt halt. So how do you make easy money in such a volatile environment? When the panic sets in, so does what might be termed ‘computer panic’. Traders become concerned and start selling and then a few stop losses, those automatic trades that are meant to stop losses when the price falls a little, all kick in and that causes the share price to fall even further. The market makers know this and they increase the spread just a little to make their cut even bigger. You can make easy money when this happens by buying on the artificially low and then selling when the high comes. This is difficult for small investors because we tend to get hit with extortionate dealing fees.

easy money

Easy money

It is still a good idea to do your research decide which companies you want to invest in and then wait for an opportunity to buy. You won’t make easy money but if the price is sent down artificially low because lots of stop-loss orders have kicked in or the market makers are doing a tree shake then that is a great time to buy.

Tesco

Tesco dropped 5% last week but has recovered a little this week. The Booker takeover is still in progress so when that ends I expect the price to be higher. If I can make 20% on my Tesco shares I’ll sell. I’m watching GSK (GlaxoSmithKline) with interest again. The pound is appreciating a little which makes GSK a poorer investment but they do pay a good quarterly dividend. At under £13 a share, GSK now looks good value. They might drop a little more but in the long-term they’re a good investment and will pay steady dividends. I’m also watching Optibiotix which has fallen to 59 this week but that is a far riskier investment. They might also suffer if the pound appreciates more.

Looking forward, I see more volatility both in the markets and the wider economy. Interest rates are likely to go up. If inflation rises then the favoured month is in May for a rate rise. They do like to give the markets a surprise, though, so it could be sooner or later. The FTSE 100 is still quite high and we could see falls as the pound appreciates. If the uncertainty over Brexit abates with some kind of deal then we might see the safe haven of the FTSE 100 being less favourable to investors as they look for better returns in the FTSE 250 or even the AIM market.

That’s all for this week, if you like my ideas on finance and investing why not subscribe by entering your email address at the top of the sidebar. These ideas are not advice, if you want advice, talk to a qualified financial advisor. Easy money is money you don’t have to work hard for, so any money you make from investing is easy money!

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