Invest in the best tech stocks today with Webull or Robinhood.

The technology sector is made up of companies that operate in the semiconductor, artificial intelligence (AI), software, computer hardware, and other industries related to information technology. This sector includes some of the world’s most well-known and largest companies, such as Microsoft, Google, Amazon, and Nvidia.

Stocks in the tech sector, which are holistically represented by the Invesco S&P 500® Equal Weight Tech ETF (RYT), have gone down with the rest of the market as RYT has provided investors with a return of -18% over the past 12 months. 

Here are the top technology stocks with the highest growth, greatest value, strongest momentum, and most searches on Google.

Best Technology Stocks Right Now

What are Tech Stocks?

From 2007 to 2017, the tech industry zoomed from $65.2 billion to $263.6 billion. However, this phenomenal growth in the tech sector doesn’t come without risks. Innovations constantly cause disruptions within the market. For example, in 2007, the introduction of the iPhone created many new businesses and ruined others. It caused the tech industry to evolve into what it is today. 

This sector offers more than just sturdy mega-cap stocks and household brands like Amazon. The tech sector niche includes companies of all sizes, including start-ups. You must do your research to successfully invest in tech stocks.

Best Online Brokers for Tech Stock 

A good online broker can make investing and trading tech stocks more efficient and can help you be more successful. Here are some great online brokers you should consider. 

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Active and Global Traders

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Active and Global Traders

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Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 150 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.  

IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.

Best For

• Access to international markets
• Active traders
• Detailed mobile app that makes trading simple
• Wide range of available account types and tradeable assets

Pros

• IB SmartRouting provides significant price improvement vs. industry
• Fractional trading allows investing regardless of share price
• Industry’s lowest margin rates
• Earn more by lending your fuly-paid shares

Cons

• Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources

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Leveraged Trading

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Leveraged Trading

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81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Plus500 is an online CFD broker focusing on contracts for difference (CFDs). CFDs are similar to binary options in the U.S. where traders take all-or-nothing speculation on the prices of certain securities like indices, commodities or currencies. While not legal to trade in the U.S., CFDs are legal in many jurisdictions across the globe and Plus500 offers a wide array of tradable markets using these instruments. 

Plus500 doesn’t charge commission and only profits off the spread, which is the difference between the buy and sell price of a specific security. But Plus500 is not a broker for beginners — the education materials are sparse and CFDs are risky derivatives capable of sapping out all of an investor’s capital. Only trade these instruments if you understand how they operate and the risks involved with buying them.

The Plus500 CFD platform is for CFDs. The Plus500 Futures platform offers futures for U.S. customers, and Plus500 Invest offers stock trading.

Best For

• Traders looking for a smooth mobile experience

Pros

• Great mobile app
• Low spreads and commissions
• Unlimited demo account
• Plus500 offers three platforms: Plus500 Futures, Plus500 Invest and Plus500 CFD.

Cons

• Only derivatives are available
• Futures are available to U.S. residents while CFDs are not available for U.S. residents.

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Trading Ideas

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Trading Ideas

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Public is the only investing platform that lets you trade stocks, ETFs, crypto, bonds, options and alternative assets—like fine art and collectibles—all in one place. Public also provides access to custom company metrics, live shows about the markets, and insights from a community of millions of investors, creators, and analysts.

Today, Public provides more ways to create a diversified portfolio than nearly any other online broker. Members can engage in sophisticated investing strategies and access a wealth of investing insights—from company-specific analysis to live audio shows and town hall-style Q&As. In addition, Public offers a premium membership tier with unique company KPIs, detailed performance metrics, and institutional-grade research. 

 

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• Stock and ETF investors
• Crypto investors
• Investors looking to diversify with alternative assets or bonds and options

Pros

• Commission-free stock and ETF trading
• Fractional share investing
• Advanced data, tools, and insights with Public Premium

Cons

• You can’t transfer crypto to another wallet
• No mutual funds or precious metals
• At this time, only offers individual brokerage accounts and not IRAs

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Commission-Free Mobile Trading

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Commission-Free Mobile Trading

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Robinhood is a popular trading platform known for its commission-free trades and user-friendly mobile app. Ideal for novice investors, Robinhood makes it easy to buy and sell stocks, ETFs and cryptocurrencies. The platform offers a straightforward, no-frills experience, making it accessible for users new to investing. With features like fractional shares and a sleek interface, Robinhood lowers the barriers to entry for investing, allowing users to start with just a few dollars. It lacks the advanced tools and research options that more experienced investors might seek. Overall, Robinhood is a great choice for beginners seeking a simple way to invest.

Best For

• Beginners looking for simplicity
• Mobile-first investors
• Commission-free trades

Pros

• User-friendly mobile app
• Instant double
• Cash management
• Access to cryptocurrencies

Cons

• Limited research tools
• No mutual funds available
• Basic customer support options

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Active Short Sellers

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Active Short Sellers

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TradeZero is an online broker and free stock trading platform that provides everything you need to successfully share and trade, including round-the-clock customer support. TradeZero provides four different trading state-of-the-art software programs with its services, a locator for sourcing shares for shorting, commission-free trades, and real-time streaming, to name a few of the features promoted on their website. The software is a unique and (potentially) affordable option for anyone interested in stock trading.

Best For

• Traders seeking high transparency and mobility in a stock trading program
• Those attracted to commission-free trades
• Those seeking a free version of a high-quality trading program

Pros

• 24/7 live customer support
• Uses ZeroWeb technology, a powerful level 2 online platform with direct market access
• Mobile app allows users to access stocks and trade in real-time while on the go

Cons

• Enforces Pattern Day Trading restrictions (accounts need to maintain a daily equity balance of at least $25k)
• Mobile app could offer more features

Features to Look for in Tech Stocks

Here are the top features investors should look for before investing in technology stocks.

• Profitability: Hands down, the best way to determine whether you should buy a particular stock is to get a firm grasp on whether it can turn a profit. Look at its profitability ratios to find out how it stacks up.
• Total addressable market (TAM): The total addressable market (TAM) reveals the maximum amount of money a company can earn in a select market — provided a company has 100% of the market share. 
• Growth capacity: When a company is in the process of releasing a new product, a new customer segment or plans to cross-sell an existing product to customers, you want to evaluate the company’s potential growth capacity.
• Revenue: Look at a company’s operating revenue and nonoperating revenue and what tech companies make from their core business (operating revenue) and one-time business activities (nonoperating revenue). You’ll want to carefully consider both before you pull the trigger on a tech stock.

Things to Consider With Technology Stocks

As you look at a tech company, you should take pause when you run across certain issues. These issues might not prevent you from buying, but you need to know how certain tech startups, artificial intelligence outfits, semiconductor companies, etc operate. If you can’t find good information, you may want to move on. Remember, the stock price is just one step in reading what’s going on with Wall Street. The rest is buried in these little details:

Products

When you invest in a company, it should have products that you can see people or businesses using. Sure, a chatbot or new style of wearables is cool, but do they have potential to grab some marketshare?

Venture Capital

Where is the money coming from? Big tech companies don’t need endless investment, but a new software company has developers and venture investors to satisfy. If the company isn’t performing well, it could burn through its funding. Would it still be a good investment when it’s behind schedule and over-budget?

The Supply Chain

The supply chain hits everyone from semiconductor companies to cloud computing firms and everyone in between. Venture capital investment can pay for the supplies, but if those supplies never come, what next? The parent company may need to put projects on hold, the company could go under or it could be delisted in a worst-case scenario. So, if cars are running low on semiconductors or parts, your favorite tech ventures could be struggling, too.

Putting Tech Stocks in Perspective

The technology sector can attract you with its stability and growth potential. Investigate tech stocks’ potential to expose you to lucrative returns. 

To find other top-performing stocks see below:

• AI Stocks
• Oil Stocks
• Gold Stocks

Compare online brokers, here are some of Benzinga’s favorites:

• Robinhood
• TD Ameritrade
• Webull

Frequently Asked Questions

The post Best Tech Stocks Right Now by Shanthi Rexaline appeared first on Benzinga. Visit Benzinga to get more great content like this.

When looking for the best long-term investments, it’s important to know that long-term investing has different meanings in different contexts. In accounting, a long-term investment is an item in the balance sheet listed under the asset column, which a company holds for more than a year from the balance sheet date.

Meanwhile, for investors, long-term investing is buying and holding a security for a longer term, usually for over a year. The length of the investment horizon for a longer-term investment varies. For stocks, it could be any time over a year, while for long-term bonds held till maturity, it could be ten years or possibly more.

Alternatively, short-term investing involves a time period of fewer than three years, and the asset classes generally categorized as short-term investments are bonds or bond funds, with a duration of one to three years, money-market funds, certificates of deposits, stocks, etc.

Unlike short-term trading, long-term investing is built on the foundation of fundamentals and macroeconomic conditions.

For information about short-term investing, don’t miss Benzinga’s Best Short-Term Investments. Here is Benzinga’s list of the best long-term investments. 

Merits of Long-Term Investing

A long-term investment helps reduce transaction costs. Additionally, investing in taxable assets provides you with incremental wealth, which is compounded over time.

What’s more, you also save time because you only work on finding a quality investment. Later on, you’ll likely only have to check your accounts occasionally.

Strategies for Long-Term Investments

• As with any investment, starting early is a must. Returns on investments made during your early years will compound, earning you more money over time.
• Even if the value of your holding drops, it’s better to stick with it, rather than liquidate it. This is especially true when the asset price drops. The very premise behind long-term investing is that losses will even out over time.
• It’s important to identify poor performers early on. High-quality assets should be held even amid losses, as they wield the potential to make a strong comeback.
• Learn the importance of rebalancing. As you age, the proportion of safer securities such as bonds could be increased at the expense of risky assets.

Best Long-Term Investments

A Statista analysis showed that in 2016, 35 percent considered real estate as the best long-term investment option. This was followed by stocks/mutual funds at 22 percent. About 17 percent considered gold as the best investment option compared to 15 percent for savings accounts/CDs and 7 percent for bonds.

Stocks

Stocks are highly volatile, and investing short-term in this asset class could be ultra-rewarding at times. However, you’ll have an equal chance of losing money as you do earn it.

The best way to take the risk out of the equation is to identify some quality stocks and stay invested in them for the long term.

Average annualized stock market return, taking the performance of the S&P 500 Index as a proxy, has been 15.5 percent over the past five years and a more modest 8.8 percent over the past ten years.

An analysis of long-term investment returns over an 84-year period, from 1926 to 2010, which included three market crashes, showed that adopting a buy-and-hold strategy would have netted a return of 12.1 percent with small stocks and 9.9 percent with large stocks, which are excellent returns overall.

Check out How to Invest in Stocks for a quick tutorial.

Choosing Long-Term Stocks

In order to pick individual stocks to hold long-term, you’ll have to consider several factors, including:

• Price-earnings ratio or P/E ratio, which helps to determine if a stock is overvalued or undervalued. It is calculated by dividing the market price by the earnings per share. In order to determine whether a stock is a value buy, its P/E is compared to the P/E of the overall industry. A stock is attractive if its P/E is at a discount to the overall industry P/E.
• Consistent earnings and revenue growth.
• Consistency in paying out dividends.
• Macroeconomic conditions

Index Funds

Billionaire investor Warren Buffet recommends investing in some index funds. An S&P index fund consists of all stocks that are part of the index.

The turnover rate, which is the percentage of a fund’s holding that changes every year, is low, so the associated fees and taxes are also low.

Especially for retirement savings, Buffet recommends consistently buying an S&P 500 low-cost index fund.

ETFs

Exchange Traded Funds, or ETFs, are marketable securities that track indexes, commodities, bonds or index funds. These are traded like shares on a stock exchange, and due to the higher liquidity and lower cost compared to mutual funds, ETFs have gained in popularity in recent years.

Even among ETFs, index-based ETFs are a better bet for long-term investing. Some index-based ETFs include:

• SPDR S&P 500 ETF Trust (NYSEARCA:SPY)
• SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA)
• PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ)
• iShares Russell 2000 Index (ETF) (NYSEARCA:IWM)
• Vanguard Total Stock Market ET (NYSEARCA:VTI)

DRIPs

A dividend reinvestment plan, or DRIP, is a plan which allows investors to buy shares of companies instead of the cash dividend due to them.

Long-term investors who shortlist a few good businesses with an intention of buying and holding can use this option to increase their ownership in these companies at a very low cost.

Bonds

A bond is a debt instrument issued with the purpose of raising capital. A bond investor lends funds to the issuer for a fixed period in return for periodic interest payments and the repayment of principal. Bonds are usually issued by companies, municipalities, states, governments, etc. to finance their projects and activities.

Bond maturities can range from less than one day to over 30 years. However, longer-dated bonds are considered riskier than ones with shorter maturity periods, given the impact changing interest rates can have on bond values and returns. 

For long-term investing, there are three types of bonds:

• Treasury bonds and savings bonds issued by the federal government
• Municipal bonds issued by cities, regions or states
• Corporate bonds issued by public or private companies

Treasury and savings bonds are the most secure bond options available. Municipal bonds are less risky, relative to corporate bonds, and are rated as AAA, AA, or A; AAA is the least risky and A is the riskiest.

For the ten-year period ending Sept. 30, 2014, average annual return of the Barclays Aggregate U.S. Bond Index, a proxy for the domestic bond market, was 4.62 percent compared to the 8.11 percent return for the S&P 500 Index.

The performance of bonds pales in comparison to developed-market international stocks, which returned 6.32 percent on average annually, and emerging market stocks, which fetched average annual returns of 10.68 percent.

However, the appeal associated with bonds is their safety. Also, bonds are the only avenue for diversifying your portfolio, helping to smooth out the volatility associated with stocks. There could be periods, especially during uncertain times, when bonds could outperform stocks.

A person in his or her 20s or 30s could start out with a 100 percent stock portfolio and gradually start including bonds as he or she ages.

Real Estate

Real estate offers an investor the dual benefit of gaining a steady income stream and benefiting from asset appreciation. From a long-term perspective, real estate investment would involve:

• Investing in a basic rental property or commercial real estate.
• A real estate investment group is a company that buys or builds apartments or condos and then allows investors to buy single or multiple units of the property. The group manages the entire property and in return, partakes in the rent due to the investors who have bought into the unit(s).
• Buying units of a good quality real estate investment trust, or REIT, which is traded on major exchanges like stocks. To acquire the status of a REIT, a company is required to pay out 90 percent of its taxable profits in the form of dividends.

Gold

Gold was once used as currency, and has since then been replaced by paper money. However, the appeal of gold as an investment option has never diminished. Because of its safe-haven appeal, gold is preferred by many during uncertain times.

Gold has delivered a compounded annual growth of 9.6 percent since an all-time low of $250 a troy ounce in 1999. However, the commodity is still off the all-time of high of $1,895 an ounce in 2011.

There are several ways of investing in gold, such as:

• Buying physical gold.
• Investing in a gold stock such as Barrick Gold Corp (USA) (NYSE:ABX), or a gold ETF such as SPDR Gold Trust (ETF) (NYSEARCA:GLD).
• A Gold IRA.

Savings Accounts/CDs

A savings account offers flexibility in that it allows regular deposits, subject to federal ceilings.

Withdrawals are not penalized like CDs, which are meant for a fixed period. Though funds parked in a savings account earn interest, the interest rate is often lower than what is earned on a CD. The interest rate on a savings account is usually given in terms of the annual percentage yield, or APY.

APYs for a savings account in some banks are as follows:

• American Express Bank – 1.45 percent (minimum to earn APY is 0)
• Capital One360 – 1.40 percent (minimum to earn APY is $10,000)
• Goldman Sachs Bank  – 1.50 percent (minimum to earn APY is $1)
• Citibank – 0.10 percent (minimum to earn APY is 0)

CDs are a preferred investment option if you’re looking for a low-risk investment. A long-term CD is preferred during periods of falling interest rates, and it carries higher interest rates.

Vanguard as well as Edward Jones offer 2.85 percent on a 10-year CD. Fidelity’s 5-year CD rate is 2.65 percent.

There are several CD rates offered by different financial institutions.

IRAs

Money intended for retirement savings can be parked in an Individual Retirement Account, or IRA.

For long-term planning, it’s vital to identify retirement income goals. To do that, it’s important to zero in on your investable surplus and then put the surplus to work through a savings program.

It’s possible that the most important thing to do is analyze cash flows out of savings to determine if retirement income goals are being met.

The most widely accessible type of plan is the 401(k), which accounts for about two-thirds of total defined contribution plans.  

In a 401(k), an employee can choose either to defer a percentage of income to a 401(k) account The amount saved is not taxable until it is withdrawn.

Meanwhile, in Roth 401(k), the contribution is done on an after-tax basis and therefore a subscriber to this plan need not pay tax on it when the amount is withdrawn.

Some other defined contribution plans:

• 403(b), for employees of non-profit corporations such as schools.
• 457, for employees of certain types of non-profit businesses as well as state and municipal employees.
• Thrift Savings Plan, or TSP, for federal government employees.
• A Keogh retirement plan is for self-employed individuals or unincorporated businesses for retirement purposes. The Keogh plan can be structured as a defined benefit or defined-contribution plan.

For more information, check out Benzinga’s top IRA brokerages. 

Collectibles

A collectible is any physical asset that appreciates in value over time due to its rarity and the demand that people have for it.

Usually, collectibles are exchanged in antique stores, collectible retail shops, auctions, online exchanges, etc. These can be jewelry, stamps, coins, work of fine art, etc.

For more information about brokerages for these types of long-term investments, check out Benzinga’s Best Online Brokerages.

Long-Term Investments: The Key to Sustained Financial Growth

Long-term investments are important for a company’s ongoing financial growth and are a key part of a solid financial strategy. By diversifying asset portfolios, these investments help reduce risks linked to market changes and economic shifts. This diversification allows companies to distribute their capital across different sectors, lessening the effects of downturns in any one area.

Long-term investments offer regular income through dividends and interest, enabling businesses to keep liquidity and support operations without depending only on short-term revenues. This steady income contributes to stability, which is important for continuous financial planning and growth efforts.

Making long-term investments shows that a company is open to taking risks in order to achieve greater rewards. By putting money into assets that have growth potential over longer periods, businesses can potentially gain significant returns that surpass those from safer strategies. In essence, long-term investments serve as a strategic decision aimed at creating a robust business environment, supporting ongoing growth and stability.

The post Best Long-Term Investments by Shanthi Rexaline appeared first on Benzinga. Visit Benzinga to get more great content like this.

Derivative contracts were born because of people’s innate desire to circumvent uncertainty. A derivative contract is a contract drawn up between two parties, the price of which is derived based on an underlying asset.

The widely-used derivatives include futures, options, swaps, and warrants. A futures contract provides for buying or selling an asset at a predetermined price at a future date, while an option contract allows the purchaser of the option the right to sell or buy a specific asset at a later date at an agreed-upon price.

Apart from the basic, plain vanilla put and call options, variants called exotic options are also available. An exotic option is a little more complex, with special features or pay-off structures intended to meet specific needs of investors.

One example of an exotic option is the binary option.

What are Binary Options?

Binary options, as the name implies, has two possible outcomes:

1. The price of the underlying asset finishes either above or below the specified price at the specified time. It can be categorized as one of the simplest financial assets.
2. Based on a “yes” or “no” proposition, it allows an individual to trade, although the risk, as well as profit potential, are capped.

How Do Binary Options Work?

Binary options are a type of financial instrument that allow traders to make predictions on the future direction of an asset’s price. They are called binary because there can only be two possible outcomes: the asset’s price will either increase or decrease in a certain period of time.

Traders enter into binary options contracts by selecting one of two options: a “call ” or a “put”. A call option gives the trader the right to purchase an asset at a certain price on (or before) a certain date. A put option gives the trader the right to sell an asset at a certain price on (or before) a certain date.

If the trader correctly predicts the direction of the asset’s price, they will make a profit. If they incorrectly predict the direction of the asset’s price, they will incur a loss.

Binary options can be used to speculate on the movements of a wide range of financial markets, including stocks, indices, currencies and commodities. They are also popular among investors who want to take advantage of short-term trades with limited risk exposure.

Evolution of Binary Trading Options

Binary options became available for retail traders following SEC approval in 2008.

Previously, binary options trading existed but was available only to banks, institutional investors or high net-worth individuals through the over-the-counter market.

In 2007, when the subprime mortgage crisis began to rear its ugly head, the Options Clearing Corporation, or OCC, embarked upon the job of developing regulatory framework for the options market, while also proposing changes to upgrade binary options to the status of a financial asset that could trade as a standalone instrument in major exchanges.

Following SEC approval, the Chicago Board Options Exchange (CBOE) and the American Stock Exchange offered binary options to retail traders. In its early days, binary options came with a lot of restrictions such as the availability of merely call options and options on the S&P 500 Index.

Slowly and steadily, the popularity of binary options increased amid the broadening of the variety of binary options available for trading and the improvement in the trading software that now allows online and mobile app trading.

Types of Binary Options

Binary options are a popular trading tool. They allow investors to speculate about the price movement of various assets within a set timeframe. Unlike traditional options, binary options have a simple “yes” or “no” outcome. This provides a clear approach to trading. As the financial landscape changes, new types of binary options have developed. These options cater to different trading strategies and risk levels. It’s important for traders to understand these types to optimize their investments and minimize risks. The main categories of binary options include high/low options, one-touch options, and boundary options. Each has its unique characteristics and potential benefits. Whether you are an experienced trader or new to the markets, understanding these types can improve your trading decisions and overall experience.

High/ Low Option (Above/Below Option)

High/Low options are a simple and popular type of binary options. Traders predict if the asset price will be higher or lower than the current price at expiration. If the prediction is correct, the trader earns a profit. This type is ideal for beginners in binary options trading. It provides a clear “yes” or “no” approach to price movement.

Touch Option

In this option, traders predict if the asset’s price will “touch” a predetermined level before expiration. If the price touches this level, the trader wins the trade. This is true regardless of where the price closes. This type of trading is popular in volatile markets. The dynamic price movements can lead to higher potential returns in a short time. There are variations, such as the “No Touch” option. In this case, the trader bets that the price will not reach the specified level.

Range Option

Boundary options enable traders to forecast whether an asset’s price will remain within a specific range or exceed it during the trading period. If the asset price stays between the designated lower and upper limits, the option will be considered “in the money.” This type of option is suitable for traders who expect the asset price to remain stable within certain levels instead of anticipating a significant price movement.

60 Seconds Option

This is a short-term trading option. Trades last for just 60 seconds. It is popular among traders who want to exploit quick market movements. High-frequency trading often uses this format. These trades are very short, which increases the risk. However, they can yield rapid returns. This option suits experienced traders. They can handle the fast-paced nature of short-term trading. They also prefer to make quick decisions based on small price changes

Cash-or-Nothing vs. Asset-or-Nothing

There are two forms of options: cash-or-nothing and asset-or-nothing.

A cash-or-nothing option pays a trader a fixed amount of money or nothing at all, while an asset-or-nothing options also has a fixed payoff but the payoff is equal to the price of the asset.

Other Terms

• Underlying asset: The asset on which the binary option is based upon, or a security used in the binary options contract.
• Call: An option contract drawn up by a trader who believes the price of the underlying asset will increase by the time the option expires.
• Put: An option purchased by a trader who believes the price of the underlying security will drop by the time the option expires.
• Strike price: The price of an underlying asset at the time of the purchase of the binary option, compared against the price of the asset at the time of the expiry of the option.
• In-the-money, or ITM: An option is in-the-money if a call option’s strike price is below the market price of the underlying asset, or if the strike price of a put option is above the market price of the underlying asset.
• Out-of-the-money, or OTM: When the strike price of a call option is above the market price of the underlying asset or when the strike price of a put option below the market price of the underlying asset, then the option is out-of-the-money.

Breadth of Underlying Assets

Binary options provide for trading a host of underlying assets, some of which are:

• Stocks
• Indexes
• Commodities
• Currency pairs

Binary Options Example

Assume the bid and ask price of a binary options contract for the EUR-USD currency pair at greater than $1.415 are $30 and $34, respectively. A trader who believes the pair will close above the $1.415 level at 4 p.m. ET, will buy the call option at $34.

Since the option can increase in value to $100 or drop to $0 depending on how the EUR-USD pair moves, a traders makes a profit of $66 (if the pair trades above $1.415 at the specified time) or incurs a loss of $30 (if the pair trades below) $1.415 at the specified time.

The price of the binary option is determined by the market, based on the likelihood of the proposition implied by the contract coming true. If the odds are less, the option price will be low (say $10 or $15).

If you invest $100 in a call option in the S&P 500 Index, which is currently trading at 2,875 (strike price), with an expiration time of 30 minutes, you stand to gain $100, plus a payout (if specified in the contract) if the index is above 2,875 at the expiration time.

The expiration time can be the last traded price or the average of the bid and ask price, depending on the terms set by the broker.

However, if your binary option expires out of the money, or the index is trading below the strike price, you stand to lose your $100.

If the market price is exactly at the strike price at the time of expiration, then you preserve your investment, without any profit.

Advantages of Binary Options Trading

• You’ll know both the risk and reward in advance, or at the time a contract is struck
• Binary options expire quickly and can generate substantial returns with a few quick, successful trades. The expiry period could range from 15 minutes to up to a week or two.
• Investments could be as little as $10.
• Binary options provide an opportunity to trade with a wide range of assets available all over the world.

Disadvantages of Binary Options Trading

• Since some of the binary options brokers are loosely regulated, you might face the risk of losing your money if your broker opts to hoodwink you.
• Since binary options trading is more of a speculative activity, despite the research and analysis going into it, the outcome of the investment is not always a certainty.
• Earnings potential is limited relative to the movement in the underlying asset. Despite whether an underlying instrument moves $1 or $100 in the desired direction, your return is limited to the price of the binary option.

Brokers That Allow Binary Options

You’ll find that a lot of brokers allow for binary options trading. However, some of them aren’t trustworthy or fall far below the threshold for acceptable brokerages. You can read more about this in our Best Binary Options Brokers guide. Below is a quick look at the top binary options brokers.

Best For

Professionals and Novice Traders

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Best For

Professionals and Novice Traders

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1 Minute Review

Pocket Option involves significant risks and questionable practices. Although it asserts that it does not serve residents of EEA countries, the USA, Israel, the UK, and Japan, it allows deposits without verifying users’ locations.

Pocket Option is an online trading app for binary options and forex. The web-platform, smartphone app and MetaTrader 5 software provide you access to over 100 different assets. 

Best For

• Investors interested in options trading and forex
• Professionals and novice traders
• Investors looking to learn

Pros

• Over 100 assets including cryptocurrencies, stocks and commodities
• Yield of up to 95%
• Free demo account with $10,000
• Free program; minimum deposit of $50
• Secure and safe platform with 24/7 trading
• Multi-language support and cash-back program

Cons

• Regulated by the International Financial Market Relations Regulation Center (FMRRC) rather than a country’s own regulators

Best For

Binary Options

Overall Rating

get started securely through Raceoption’s website

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Best For

Binary Options

N/A

1 Minute Review

Raceoption is a binary options trading platform that provides you with access to more than 100 combined stocks, commodities, currencies and index funds. While the platform is not available to U.S. residents (as they cannot trade contracts for difference (CFDs) under current regulations), it can be a viable option for casual investors looking for an all-in-one platform to execute short-term trading strategies.

With Raceoption, you can open an account in as little as a few minutes and begin trading as soon as your funding is confirmed. The minimum required deposit is $250 and the minimum trade value is only $1, which makes Raceoption’s platform an accessible option if you don’t have thousands of dollars on hand to fund your account. If you decide to open an account with Raceoption, know that you may be investing in exceptionally volatile assets — so do your research before committing and never risk more money than you can afford to lose. 

Best For

• Casual investors looking for a diverse asset selection
• Competitive investors looking for an all-in-one place to trade
• Anyone who wants to invest outside of the United States

Pros

• Copy trading feature allows you to learn from experienced traders
• Withdrawal processing guaranteed to begin within 60 minutes
• Stock, currency, digital asset and additional trading markets available

Cons

• Not currently available to U.S. residents

Best For

Active and Global Traders

Overall Rating

Read Review

get started securely through Interactive Brokers’s website

More Details

Best For

Active and Global Traders

N/A

1 Minute Review

Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 150 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.  

IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.

Best For

• Options traders
• Traders trading 24/7
• Sophisticated investors
• Access to International markets

Pros

• Advanced trading platform & suite of options trading tools to create & execute sophisticated trading strategies
• Fixed fees offer infrequent traders low, flat rate per contract, inclusive of all fees
• Tiered fees offer active traders lower cost per transaction and possible exchange rebates for higher volumes

Cons

• Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources

Frequently Asked Questions

The post What are Binary Options? by Shanthi Rexaline appeared first on Benzinga. Visit Benzinga to get more great content like this.

Forex trading or foreign exchange trading, is the largest and most liquid market in the world, with trillions of dollars being exchanged daily. It can be done by individual traders, financial institutions, and even governments, making it a highly diverse and dynamic market.

FOREX.com and FXCM are popular choices for forex trading. While FOREX.com is a well-established and highly-regarded broker, FXCM also has a solid reputation in the forex industry. FOREX.com offers a wide range of currency pairs and other financial instruments and FXCM offers competitive spreads, a variety of trading platforms to choose from, and access to a diverse range of markets.

Here is an analysis of the services and features offered by both platforms to help you choose between FOREX.com vs. FXCM.

FOREX.com vs. FXCM: Overview

Let’s compare FOREX.com and FXCM’s spreads and fees, platform and tools, ease of use, support and research offerings, using a side-by-side ranking comparison.

Read Review	Read Review
Commissions Spreads start as low as $1 But vary based on trading volume	Commissions Spreads vary
Best For MetaTrader 4 and 5 users Beginner forex traders Active forex traders Demo account Customizable charts with 14 time intervals and multiple time charts	Best For Traders who prefer advanced trading platforms and tools Active or high-volume traders Traders who require superior customer support

FOREX.com vs. FXCM: Platform and Tools

What FOREX.com Offers

FOREX.com offers three powerful proprietary trading platforms for forex traders, completely focused on performance, flexibility, and speed. The advanced desktop platform offers highly customizable dashboards and trade preferences, powerful charting tools, 80+ technical indicators, extensive drawing tools, and advanced analytic tools, including integrated trading strategies with hundreds of predefined templates.

The broker features advanced platform analysis tools through its desktop platform from Autochartist, Faraday, and Recognia. FOREX.com’s web platform has many integrated trading tools, advanced charting features, 70+ technical indicators, 50+ drawing tools and more. The platform also carries market commentary and analysis. It facilitates seamless account management, funding, and withdrawals.

The mobile platform is available for both iOS and Android phones. It offers full trading capabilities, and carries integrated news, market commentary and analysis as well as real-time alerts and notifications. FOREX.com also provides clients with the MetaTrader 4 platform.

FOREX.com offers third-party trading and charting software, including NinjaTrader, Tradable (an application-based trading platform) and TradingView.

What FXCM Offers

FXCM offers multiple third-party trading platforms. Its flagship platform is Trading Station, which offers web, desktop, and mobile trading platforms.

The Trading Station Web 2.0 platform has an intuitive user interface and several new features. The Trading Station desktop platform gives you the ability to customize your platform and offers a robust suite of analytical and automated trading tools, preloaded strategies, advanced backtesting functionality, and detailed strategy, history and analysis tools.

The Trading Station mobile platform is available for both iOS and Android devices. You’ll get live streaming rates, place and manage your orders, access charts and analyze news and reports.

Like FOREX.com, FXCM offers MetaTrader 4 and NinjaTrader and the copy trading platform ZuluTrade.

Apart from core platforms, FXCM also offers a suite of specialty third-party platforms that can be integrated with FXCM. These third-party platforms include QuantConnect, MotiveWave, AlgoTerminal, AgenaTrader, Sierra Chart, SeerTrading, NeuroShell Trader and StrategyQuant.

Bottom Line

FXCM is the better of the two because of its multiple third-party offerings. However, FOREX.com edges out FXCM in the platforms and tools categories.

FOREX.com vs. FXCM: Research Offerings

What FOREX.com Offers

FOREX.com provides a plethora of research content through all the trading platforms it offers, including real-time news, advanced charting, technical and fundamental research, economic analysis, a global economic calendar, and live trading webinars.

Live trading sessions are 30-minute webinars presented by the firm’s team of global analysts, which give real-time insight, market commentary, actionable trade ideas as well as live Q&A sessions.

It also allows social trading, or copy trading, and provides backtesting in a bid to generate trade ideas.

What FXCM Offers

FXCM offers:

• Global market news on forex, commodities, and metals
• Free daily newsletter titled “Before the Bell,” which gives actionable trading setups before the market opens
• Market scanner, which performs a quick analysis and provides a trader with signals
• Free trading support portal called FXCM Plus, which gives access to exclusive tools such as TechnicalAnalyzer and Trading Signals
• Economic calendar

FXCM also offers educational resources such as webinars, seminars, live classroom training, free trading accounts, a free practice account, video tutorials and more.

Bottom Line

In terms of research offerings, both platforms are equal, as there isn’t much that separates FOREX.com and FXCM.

FOREX.com vs. FXCM: Commission and Fees

FOREX.com’s Fees

FOREX.com offers fixed spreads as well as variable spreads, which fluctuate throughout the day depending on liquidity and market volatility. FOREX.com fees also include:

• Commission on CFD trading and forex trading when the relevant account is a commission account, a commission of $5 per standard lot of 100,000 and a low variable spread, chargeable at the execution of the trade.
• A minimum initial deposit of at least $50 of a client’s selected base currency is mandated, although at least a $2,500 deposit for increased trading flexibility and risk management is recommended.
• Inactivity fees are applicable for accounts with a balance of less than $10,000. If there is no trading activity or no open positions for more than 12 months, you’ll pay a $15 inactivity fee.
• If you hold your position overnight, you’re charged a financing/rollover charge, which is automatically applied to your account each day you hold an overnight position.

Example average spreads for some major currency pairs are as follows:

• EUR/JPY – 1.7
• EUR/GBP – 1.5
• EUR/USD -1.3
• USD/JPY – 1.4
• GBP/JPY – 3.3

FXCM’s Fees

Example average spreads for some major currency pairs are as follows:

• EUR/JPY – 2.0
• EUR/GBP – 2.6
• EUR/USD -1.3
• USD/JPY – 1.4
• GBP/JPY – 3.1

Spreads are variable and are subject to delay. The spread figures are for informational purposes only.

For CFDs, FXCM charges an all-in spread that includes the firm’s costs. FXCM charges a rollover fee if you carry the CFD position overnight.

The minimum initial deposit to open an individual or joint account is 50 units of the base currency. The minimum for subsequent deposits by card is 50 (300 for clients who reside in UK and EU) units and there is no minimum for deposits by wire.

You’ll pay a $25 withdrawal fee when the beneficiary account is located in the U.S. or U.K. and $40 when the beneficiary account is located elsewhere. The firm does not charge for deposits through wire transfer, credit/debit cards, Skrill and Union Pay.

FXCM charges an interest rate of 1.75% above the overnight rate if the account balance is negative, and the fees are charged on a monthly basis.

Inactivity or a lack of filled orders for at least a year invites an inactivity fee of the lesser of the remaining balance in your account, or 50 units of the currency in which your account is denominated. The exception is the yen, for which 5,000 yen becomes chargeable.

Bottom Line

A comparison of the average spreads of FOREX.com and FXCM reveals that FOREX.com is the cheaper alternative. The inactivity fee is also slightly high for FXCM.

FOREX.com vs. FXCM: Security

What FOREX.com Offers

FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association in the U.S., the Investment Industry Regulatory Organization of Canada (IIROC), the Financial Conduct Authority in the U.K., the Australian Securities and Investment Commission (ASIC) and the Monetary Authority of Singapore.

It is also regulated by the Financial Services Authority (FSA) in Japan and the Cayman Islands Monetary Authority (CIMA).

All customer deposits through FOREX.com are kept separate from its own operating funds and distributed across a global network of custodian banks, which invariably hold an investment-grade rating and are monitored as per the guidelines set by the Risk Committee of GAIN‘s Board of Directors.

What FXCM Offers

FXCM is regulated in the U.K. by the Financial Conduct Authority, in South Africa by the Financial Sector Conduct Authority, and in Australia by the Australian Securities and Investments Commission.

The regulated entities under FXCM also vouch for the security of clients’ funds, with the retail client funds housed in segregated accounts with top global banks. In the eventuality of the firm’s inability to repay claims, claimants are compensated by the Financial Services Compensation Scheme up to £50,000 in the U.K. This is only applicable to clients who reside in the UK and the EU.

The National Futures Association (NFA) in the U.S. has barred FXCM from membership, citing “numerous deceptive and abusive execution activities that were designed to benefit FXCM, to the detriment of its customers.”

Bottom Line

Among the two, FOREX.com scores the highest on security. FXCM’s issues with U.S. regulators are a major red flag.

Final Thoughts

Account Minimum

$100

Pairs Offered

80

Get started securely through FOREX.com’s website

More Details

Commissions

Spreads start as low as $1 But vary based on trading volume

Account Min

$250

1 Minute Review

FOREX.com is a highly trusted global broker for forex and CFD traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for traders searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels.

FOREX.com is regulated by Commodity Futures Trading Commission (CFTC) and member of the National Futures Association (NFA) in the U.S. They also are regulated by the Financial Conduct Authority (FCA) in the UK among other regulators including CIRO, ASIC and more.

Best For

• MetaTrader 4 and 5 users
• Beginner forex traders
• Active forex traders
• Demo account
• Customizable charts with 14 time intervals and multiple time charts

Pros

• Up to 5% cash back of the initial deposit
• 80+ technical indicators
• Leverage available up to 50:1 for U.S. traders
• Exclusive trading tools including Trading Central, NinjaTrade and Performance Analytics
• Trade to your full capability with the mobile app
• Live market analysis, VPS hosting, IRA accounts, corporate accounts, RAW pricing
• EUR/USD spread as little as 0.0 and low commissions
• 30 indicators for technical analysis, nine timeframes and graphical objects such as Line Studies and Shapes on MT4
• Quality execution with one-swipe trading, real-time trade & order alerts and full account management features

Cons

• No negative balance protection for U.S. clients
• No guaranteed stop-loss orders for U.S. clients

Account Minimum

$/€/£300

Pairs Offered

40

Get started securely through FXCM’s website

More Details

Commissions

Spreads vary

Account Min

50 units of base currency

1 Minute Review

Founded in 1999, London-based Forex Capital Markets or FXCM is a major international online forex and contracts for difference (CFD) broker that also provides spread betting and related services. The broker offers its clients innovative trading tools, proprietary data and premium educational resources. In addition, FXCM provides retail brokers, emerging market banks and small hedge funds access to wholesale execution and liquidity through FXCM Pro, while medium- and high-frequency funds can access FXCM’s quality brokerage services via FXCM Prime. 

You can choose from among several excellent trading platforms and can access copy trading through FXCM’s social trading platform and automated trading via FXCM Apps and MetaTrader4 (MT4). If you want to trade assets other than forex, FXCM also offers CFD trading in shares, metals, oil, commodities, indices and cryptocurrencies.  

Best For

• Traders who prefer advanced trading platforms and tools
• Active or high-volume traders
• Traders who require superior customer support

Pros

• Multiple trading platforms, including MT4
• Quality pricing and execution services
• Extensive educational resources

Cons

• Does not accept clients from the U.S.

FOREX.com and FXCM are on equal footing on many counts. However, in terms of security, breadth of asset classes, features, and user-friendliness, FOREX.com is the clear winner. Combined with the fact that FXCM has had to face regulatory backlash and is not currently available to U.S. clients, tilts the scales in favor of FOREX.com.

ESMA risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

FOREX.com vs. FXCM: Which One Should You Choose?

When deciding between FOREX.com and FXCM, it ultimately comes down to your individual trading preferences and needs. If you are a beginner looking for a user-friendly platform with access to educational resources, FOREX.com may be the better choice.

On the other hand, if you are a more experienced trader interested in advanced charting tools and a wider range of trading instruments, FXCM could be the right fit for you. Both brokers have their strengths, so it’s important to carefully consider your own trading style and goals before making a decision.

Frequently Asked Questions

The post FOREX.com vs. FXCM by Shanthi Rexaline appeared first on Benzinga. Visit Benzinga to get more great content like this.

Jump straight to it: You have to be 18 years old to buy stocks.

Buying stocks can set you up for long-term wealth. Your money can compound over time and dividend-paying stocks can provide quarterly cash flow. However, not everyone can trade stocks. You have to be 18 years old to buy stocks on your own. If you are younger, there’s still an opportunity to grow your portfolio. You can invest as a minor if your parent or another guardian opens a custodial account with you.

Investing is risk-fraught and it is not for the faint-hearted. However, long-term investors can generate significant gains if they are patient, do their research and continue investing in their portfolios.

What is Investing?

Investing is the act of buying assets like stocks and real estate with the intent of realizing a profit. Simply put, it is plowing in money in anticipation of future returns. Since investment involves two scarce and costlier inputs, namely time and money, it should be done judiciously, wisely and with utmost care.

So, what is the right age when one can start investing? We set out to explore.

How Old Do You Have to Be to Invest in Stocks?

18 is the minimum age set by most brokers for opening an account with them. This is because 18 is when a person can legally enter into a contract on his own. Some states have a mandatory minimum age of 21 for letting someone invest in stocks.

These are the states that have an over-18-years minimum requirement for investing:

• Alabama, Delaware, Nebraska – 19 years
• Mississippi – 21 years

How to Buy Stocks

If you’re ready to build out your portfolio, our step-by-step guide will help you begin investing.

Step 1: Check the Age Requirement

Children who are below 18 can have their tryst with Wall Street, but not without handholding. They can work in sync with their parents or their trusted guardians or elders to gain experience in investing.

This is called passive investing, where parents or elders buy stocks in the name of their minor wards.

Legally, even minor children can own stocks, either bequeathed to them through a will or as a gift. However, trading in stocks can be done by setting up a ‘Uniform Transfers to Minors Act’ or ‘Uniform Gifts to Minors Act account,’ depending on the state of your domicile. The account owner is an adult, but he is operating the account on behalf of the minor.

Once the child attains the mandatory minimum age, the custodian can be removed from the account and the former now becomes the sole owner of the account.

Children below the eligible minimum age can have something called either the guardian account or custodial account, which allows holding stocks in the name of the minor, but the account is operated by the minor’s designated guardian, who can either be his/her parent or a legal guardian.

Step 2: Select an Online Broker

A young investor would do well if he scouts around for a no-frills online broker which will not charge outrageous commissions. Those brokers having no minimum investment, no minimum account balance and no activity fees could be a better bet, as fledglings aren’t expected to have a huge investable surplus.

Claim Exclusive Offers

Best For

Active and Global Traders

Overall Rating

Read Review

get started securely through Interactive Brokers’s website

More Details

Best For

Active and Global Traders

N/A

1 Minute Review

Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 150 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.  

IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.

Best For

• Access to international markets
• Active traders
• Detailed mobile app that makes trading simple
• Wide range of available account types and tradeable assets

Pros

• IB SmartRouting provides significant price improvement vs. industry
• Fractional trading allows investing regardless of share price
• Industry’s lowest margin rates
• Earn more by lending your fuly-paid shares

Cons

• Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources

Best For

Leveraged Trading

Overall Rating

Read Review

get started securely through Plus500’s website

More Details

Disclosure: 81% of retail accounts lose money

Best For

Leveraged Trading

N/A

1 Minute Review

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Plus500 is an online CFD broker focusing on contracts for difference (CFDs). CFDs are similar to binary options in the U.S. where traders take all-or-nothing speculation on the prices of certain securities like indices, commodities or currencies. While not legal to trade in the U.S., CFDs are legal in many jurisdictions across the globe and Plus500 offers a wide array of tradable markets using these instruments. 

Plus500 doesn’t charge commission and only profits off the spread, which is the difference between the buy and sell price of a specific security. But Plus500 is not a broker for beginners — the education materials are sparse and CFDs are risky derivatives capable of sapping out all of an investor’s capital. Only trade these instruments if you understand how they operate and the risks involved with buying them.

The Plus500 CFD platform is for CFDs. The Plus500 Futures platform offers futures for U.S. customers, and Plus500 Invest offers stock trading.

Best For

• Traders looking for a smooth mobile experience

Pros

• Great mobile app
• Low spreads and commissions
• Unlimited demo account
• Plus500 offers three platforms: Plus500 Futures, Plus500 Invest and Plus500 CFD.

Cons

• Only derivatives are available
• Futures are available to U.S. residents while CFDs are not available for U.S. residents.

Best For

Trading Ideas

Overall Rating

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get started securely through public.com’s website

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Best For

Trading Ideas

N/A

1 Minute Review

Public is the only investing platform that lets you trade stocks, ETFs, crypto, bonds, options and alternative assets—like fine art and collectibles—all in one place. Public also provides access to custom company metrics, live shows about the markets, and insights from a community of millions of investors, creators, and analysts.

Today, Public provides more ways to create a diversified portfolio than nearly any other online broker. Members can engage in sophisticated investing strategies and access a wealth of investing insights—from company-specific analysis to live audio shows and town hall-style Q&As. In addition, Public offers a premium membership tier with unique company KPIs, detailed performance metrics, and institutional-grade research. 

 

Best For

• Stock and ETF investors
• Crypto investors
• Investors looking to diversify with alternative assets or bonds and options

Pros

• Commission-free stock and ETF trading
• Fractional share investing
• Advanced data, tools, and insights with Public Premium

Cons

• You can’t transfer crypto to another wallet
• No mutual funds or precious metals
• At this time, only offers individual brokerage accounts and not IRAs

Best For

Commission-Free Mobile Trading

Overall Rating

Read Review

get started securely through Robinhood’s website

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Best For

Commission-Free Mobile Trading

N/A

1 Minute Review

Robinhood is a popular trading platform known for its commission-free trades and user-friendly mobile app. Ideal for novice investors, Robinhood makes it easy to buy and sell stocks, ETFs and cryptocurrencies. The platform offers a straightforward, no-frills experience, making it accessible for users new to investing. With features like fractional shares and a sleek interface, Robinhood lowers the barriers to entry for investing, allowing users to start with just a few dollars. It lacks the advanced tools and research options that more experienced investors might seek. Overall, Robinhood is a great choice for beginners seeking a simple way to invest.

Best For

• Beginners looking for simplicity
• Mobile-first investors
• Commission-free trades

Pros

• User-friendly mobile app
• Instant double
• Cash management
• Access to cryptocurrencies

Cons

• Limited research tools
• No mutual funds available
• Basic customer support options

Best For

Active Short Sellers

Overall Rating

Read Review

get started securely through TradeZero’s website

More Details

Best For

Active Short Sellers

N/A

1 Minute Review

TradeZero is an online broker and free stock trading platform that provides everything you need to successfully share and trade, including round-the-clock customer support. TradeZero provides four different trading state-of-the-art software programs with its services, a locator for sourcing shares for shorting, commission-free trades, and real-time streaming, to name a few of the features promoted on their website. The software is a unique and (potentially) affordable option for anyone interested in stock trading.

Best For

• Traders seeking high transparency and mobility in a stock trading program
• Those attracted to commission-free trades
• Those seeking a free version of a high-quality trading program

Pros

• 24/7 live customer support
• Uses ZeroWeb technology, a powerful level 2 online platform with direct market access
• Mobile app allows users to access stocks and trade in real-time while on the go

Cons

• Enforces Pattern Day Trading restrictions (accounts need to maintain a daily equity balance of at least $25k)
• Mobile app could offer more features

Step 3: Research Potential Companies

Next it’s time to look into the companies you want to invest in. Begin with a company’s annual report. Take a look at the annual letter to shareholders. This will give you an idea of what is happening within the company and help you understand the numbers in the annual report.

Follow up with some research through your broker’s site. Use the analytical tools to evaluate each potential company. You can also look into SEC filings, quarterly earnings updates and the recent news. Take a look at your broker’s education options to see if anything is offered to help you learn to pick stock. You’ll likely find a free webinar or on-demand video available.

Step 4: Buy Stock

Start small when you purchase stock for the 1st time. You can purchase just a single share and add more over time.

You may also want to look into fractional shares. This allows you to buy a portion of stock, which can be a good option if you’re looking at more expensive, well-known stock.

Other Investment Options to Consider

In addition to investing in stocks, you can also explore other investment opportunities to grow your wealth at a young age.

• High-yield savings accounts: These accounts offer higher interest rates than traditional savings accounts, making them an excellent low-risk option for teens to grow their money. They’re typically FDIC-insured, ensuring the safety of deposits.
• Index funds: Index funds are a type of mutual fund or exchange-traded fund (ETF) that tracks a specific market index, such as the S&P 500. They offer broad market exposure with lower fees than actively managed funds, making them an excellent choice for long-term growth.
• Roth IRA: For teens with earned income, a Roth IRA is an excellent investment vehicle for long-term wealth building. Contributions are made with after-tax dollars but the money grows tax-free and can be withdrawn tax-free in retirement.

Build Your Stock Portfolio

You can invest in stock as soon as you have some extra cash to spare. Even if you are younger than 18, you can invest in stocks if your parent or guardian opens a custodial account for you. Saving money and earning more income will help you capitalize on market opportunities when they appear. You don’t need to wait until your 30s or 40s to buy stock. You can get started right now and our top online brokers can help you along your journey in the stock market.

Frequently Asked Questions

The post How Old Do You Have to Be to Buy Stocks? by Shanthi Rexaline appeared first on Benzinga. Visit Benzinga to get more great content like this.

Stock trading is fraught with risks, and it exposes traders to situations where they can end up losing significant money. However, investors and traders can regain their losses and end up better than before once crashes subside. Surviving your first stock market crash can be stressful but it gets easier over time. This guide will explore how you can stay firm during a stock market crash.

Uncertain Backdrop

The current macroeconomic and geopolitical environment has made it riskier to invest. Even with these risks, the stock market continues to move on the upside.

The broader S&P 500 Index, which plunged sharply earlier this year amid the onset of the pandemic, has rebounded nicely after hitting a bottom in late March. The stock market also recovered significantly after a sharp downturn in 2022.

Higher interest rates and inflation have created more pressure on the economy. Long-term investors can normally ignore the noise and invest in solid companies. The only certainty in the stock market is the presence of many uncertainties. 

Identifying a Crash

A bear market is a pullback in excess of 20% from a recent high. A stock market crash can broadly be defined as a sudden and steep decline in stock prices within a very short interval of time. When stocks begin to fall, the already weak investor sentiment worsens further. Fear becomes the dominant emotion, taking over from greed, and this leads to incessant selling, wiping away millions in market value from stocks.

History of Stock Market Crashes

Among the biggest recorded stock market crashes in the history of the U.S. are:

• The stock market crash of 1929
• The stock market crash of 1987
• The dot-com bubble burst of 1999-2000
• The 2008 crash in the wake of the Great Recession that followed the Lehman Brothers bankruptcy.

For those jittery investors panicking over potential losses, here are a few guidance points that can help you stay sane amid the pandemonium.

Allow the Turn of Events to Run Its Course

Having a clear mind is very important in investing. Knee-jerk reactions, which burn a hole in the pocket, should be avoided at any cost. Fear and panic should be kept in check.

It is better to keep in mind the maxim “buy low and sell high.”

Panicking and pressing the sell button at a time when the stock market crashes will only leave an investor poorer, shutting them out of the opportunity of capitalizing on a market rebound.

If we go back in history, stock markets around the globe have survived some serious crashes and have emerged stronger.

The most recent crash amid the Great Recession saw the S&P 500 hitting a low of 666.79 on March 6, 2009. Cut a little over a decade from there, the index has added more than 400%.

It’s just a matter of waiting out the adversity with ample patience.

Stay Immune to the Noise Around

With the mushrooming of the so-called stock market pundits, who have an opinion at every turn of the stock market, it is quite natural to be swayed by their recommendations and warnings.

At least, in times of crises such as a market crash, it is advisable to shut out of the cacophony. Heeding the advice of every expert only lends to more confusion, making it harder to think rationally.

Instead, stay focused on investment goals and look at a longer time horizon to ride out the volatility.

Turn Adversity Into Opportunity

As the saying goes, an optimist finds opportunity even amid adversity. Be that optimist who still sees the rosier side of dark times. Here are some things an investor can do to capitalize on a market downturn:

Scout for stocks of profitable companies that pay out dividends. Dividends make for a steady stream of income that accrues to an investor. It is paid out of the net income earned by the company. Apart from coming in handy for meeting expenses, dividends can also be used for reinvesting.

One can invest in a fund or ETF investing purely in dividend-paying stocks such as the Vanguard Dividend Appreciation Index Fund ETF Shares VIG 0.13% and SPDR S&P Dividend ETF SDY 0.27%.

Consider bonds. Bonds also fetch fixed income in the form of interest.

Buy recession-proof or defensive stocks such as consumer staples that can withstand the stock market sell-off.

Diversify your risk by investing in a portfolio or an ETF.

Avoiding herd mentality, maintaining one’s sanity in the face of adversity, cutting out the noise and devising a prude investment plan for the downtime will serve an investor well during times of a stock market crash.

Staying Strong During a Stock Market Crash

A stock market crash can test the most patient investors. It’s easy to follow a buy-and-hold strategy when the stock market is performing well. Stock investors have a tremendous opportunity during market crashes to accumulate shares at significant discounts. Monitoring your positions and keeping the long-term perspective in mind can help you stay vigilant during significant price declines.

Frequently Asked Questions

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If Americans as a whole were required to take a series of basic investment knowledge tests, it’s likely that we’d fail miserably. It’s easy to see why. After all, schools certainly don’t require students to know the intricacies of cryptocurrency or forex, or even know the difference between a stock or a bond. In addition, many parents don’t (or can’t) pass on investment advice to their children. So, it’s up to you to learn what you haven’t been taught. Hit the library, surf the web, and pick up one of the 14 books Benzinga recommends for investment success. Here are the best stock market books to help you gain success.

Quick Look at the Best Investing Books:

Best Investing Books of All Time

• The Intelligent Investor by Benjamin Graham
• A Random Walk Down Wall Street by Burton Malkiel
• Irrational Exuberance by Robert J. Shiller
• One Up On Wall Street: How To Use What You Already Know To Make Money In the Market by Peter Lynch
• The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John Bogle
• Security Analysis by Benjamin Graham and David Dodd
• The Essays of Warren Buffett by Warren Buffett and Lawrence Cunningham

Best Investing Books of This Year

• Unshakeable: Your Financial Freedom Playbook by Tony Robbins
• A Man for All Markets: Beating the Odds from Las Vegas to Wall Street by Edward Thorp
• Liberated Stock Trader PRO – A Complete Stock Market Education by Barry D. Moore
• Good Stocks Cheap: Value Investing with Confidence for a Lifetime of Stock Market Outperformance by Kenneth Jeffrey Marshall
• The Truth About Your Future: The Money Guide You Need Now, Later, And Much Later by Ric Edelman
• Money Machine: The Surprisingly Simple Power of Value Investing by Gary Smith
• Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond by Chris Burniske and Jack Tatar
• Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing by Joel Tillinghast

To help you out, we compiled a comprehensive list of the best stock market books from 2018, as well as historical all-time bests. You can read all the forex books you’d like when you sign up for a Kindle Unlimited account that you can access on Amazon’s free Kindle Reading App. Here is Benzinga’s list of the best investing books.

1. The Intelligent Investor by Benjamin Graham

Originally published in 1949, The Intelligent Investor is fondly called the stock market Bible. Author Benjamin Graham is considered to be a proponent of “value investing,” which focuses on the merits of long-term investing by unearthing the merits of overlooked gems.

All the more appealing is Graham’s approach of taking minimal risk along the road to profitability. For what he has contributed to investment education, Graham is called by different monikers such as the “Father of Value Investing,” “Dean of Wall Street,” etc.

Graham’s theory shunned the herd mentality of investors, who flock toward widely followed securities, and instead calls for an investment style based on fundamental analysis.

The Intelligent Investor teaches investors to manage risk through asset allocation and diversification. It also teaches valuation analysis and margin of safety, which is the difference between the fundamental value of a security and the actual price one pays for it. The greater the margin, the safer your investment is in times trouble.

Alternatively, under favorable conditions, your profits will grow exponentially. The latest revised edition was audio-released in July 2015.   The book is rated with 4.5/5 stars (based on customer reviews) on Amazon and is the number one best seller among Amazon business books.

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Audiobook: Free with Audible Trial

2. A Random Walk Down Wall Street by Burton Malkiel

Written by Princeton economist Burton Malkiel, this book has become the foundation based on which the random walk theory is built.

This theory questions the veracity of the theory behind technical analysis, or that the direction or magnitude of a past movement of a stock/market is a predictor of future movement.

Instead, the random walk theory assumes that stocks go about a random and unpredictable path. Malkiel’s book advocates the buy-and-hold strategy, and in the process shuns any kind of analysis, be it fundamental, technical or other.

Therefore, it automatically alienates Wall Street participants, who vouch for analysis and stock picking. Apart from dealing with base-level securities such as stocks and bonds, the book also walks one through other investment avenues such as money market accounts, real estate investment trusts, insurance, ETFs, tangible assets such as gold and collectibles, as well as homeownership.

It has a 4.7/5 star rating at Amazon, while at Goodreads it has a 4.06/5 star rating.

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3. Irrational Exuberance by Robert J. Shiller

Irrational Exuberance, written in 2000 by Detroit-based American economist Robert J. Shiller, a Nobel laureate and Yale University professor, explores the reasons for the illogical rally in the markets during the dot-com era. It’s one reason we choose it as one of the best stock market books out there.

Among the causes outlined by Shiller was the emergence of Internet stocks, the mutual fund industry gaining popularity, the easing of inflationary pressure, mushrooming growth of analysts and self-proclaimed pundits, who issued optimistic assessments concerning investing in stocks.

In short, the book discusses how asset price bubbles develop, evolve and finally deflate. Goodreads has a 3.9/5 star rating for the book, while Amazon has rated the second and third editions of the book 4.3/5 stars and the revised third edition at a lower 2.9/5 stars.

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4. One Up On Wall Street by Peter Lynch

One Up on Wall Street is primarily a call to do your homework and not trust analysts and experts. Instead of doing complicated economic and technical analysis, the book recommends doing one’s own research, looking at industries and companies you’re familiar with and taking suggestions from people you know.

Once a company is shortlisted, the book suggests gleaning all information that is available about it: its management, balance sheet, competitive dynamics, etc. Then, use some basic criteria such as a low P/E ratio, insider buying and a relatively low debt-to-equity ratio to pick the potential winners.

The book also discusses portfolio building and timing buying and selling.  The average customer rating on Amazon is 4.4/5 stars, while Goodreads rates it 4.13/5 stars.

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5. The Little Book of Common Sense Investing by John Bogle

The Little Book of Common Sense Investing was published in 2007. Written by the founder of the Vanguard Group, an investment management company, this book explains the ins and outs of index funds. If you’re looking for one of the best stock market books, put this one on your list.

These funds fetch you average market returns, while also keeping the cost of investment low. Therefore, this investment option helps one generate higher returns after costs.

The tenth anniversary updated and revised edition of the original book was released in October 2016 with two new chapters about asset allocation and retirement investing. Customer rating on Amazon is 4.6/5 stars.

On Goodreads, the rating is 4.1/5 stars.

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6. Security Analysis by Benjamin Graham and David Dodd

Security Analysis could qualify as an investment book classic. Written by Columbia Business School professors Graham and Dodd, the first edition of the book was published in 1934, just after the market mayhem that led to the Wall Street crash.

The authors shunned the earnings-focused approach of market participants and recommended that they focus on value investing, for which the book provided a solid foundation.

Another basic tenet of the book: armed with facts and financial analysis, one needs to scout bargains. They honed in on some basic analytics such as interest coverage, zeroing in on an appropriate margin of safety, and analysis of financial statements, balance sheets, and cash flow statements. More importantly, the book focused on all investment classes.

Average customer rating on Amazon is 4.5/5 stars; on Goodreads, readers have given it a rating of 4.1/5 stars.

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eTextbook edition: Buy it now 

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7. The Essays of Warren Buffett by Warren Buffett and Lawrence Cunningham

Buffett’s book is simply a collection of his annual shareholder letters to Berkshire Hathaway’s shareholders. These letters, compiled by noted author Lawrence Cunningham, is a must-read for investors and managers who are seeking to replicate the success of Buffett as an investor.

It contains the best piece of informal investment advice arising out of the business acumen and investment savviness of one of the most successful investors of our time, making it one of the best stock market books.

The letters are organized theme-wise, catering to different categories of audience. It also contains Buffett’s biography and a self-help investing book.

The fourth edition of The Essays of Warren Buffett: Lessons for Corporate America was published in 2015. The book notches a 4.7/5 stars rating from Amazon customers.

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Best Investing Books of This Year

The market rally, progressing unhindered throughout 2019, has attracted more people to investing. It’s no surprise that 2019’s new books aim to quench the thirst of a spawning investing community. Check out Benzinga’s top 7.

1. Unshakeable: Your Financial Freedom Playbook by Tony Robbins

Book Details

Rating: 4.5/5 stars

Brief Summary

Written by life and business strategist Tony Robbins, Unshakeable is a step-by-step playbook to lead investors toward financial freedom. The book explains in a simple manner how investors can go through market volatility with the ultimate objective of not only protecting their investment but also maximizing wealth. The book was the number one bestseller on Amazon’s personal finance section.

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• Kindle: Buy it now
• Audiobook: Free with Audible Trial

2. A Man for All Markets by Edward Thorp

Book Details

Rating: 4.2/5 stars

Brief Summary

A Man for All Markets, written by renowned mathematics professor Edward Thorp, tells the world about how the author conquered blackjack, ventured into Wall Street and using quantitative methods, became hugely successful. Rightfully, Thorp is called the father of quants. In the book, he vividly recounts how he managed to be successful by going against conventional wisdom and devising game-changing solutions. This is one of the greatest stock market books out there.

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• Audiobook: Free with Audible Trial

3. Liberated Stock Trader PRO – A Complete Stock Market Education by Barry D. Moore

Book Details

Rating: 5/5 stars

Brief Summary

The Liberated Stock Trader PRO training course provides comprehensive training which educates traders in the four core pillars of investing and is considered one of the best stock market books.

The first pillar is Fundamental Analysis which teaches students how to screen and find growth stocks, value stocks and defensive stocks. The second is Technical Analysis which will help you to master Stock Charts, Indicators, Trendlines, Volume and supply and demand. The section after that covers Market Sentiment Indicators and the psychology of trading. 

Lastly, you’ll get insight into portfolio management, trade execution and creating your own trading system.

You get a print book shipped, and 16 hours of detailed video training by the author a certified market analyst. You’ll also get lifetime access to a private Facebook mastermind group all included in the price. 

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• Buy it now

4. Good Stocks Cheap by Kenneth Jeffrey Marshall

Book Details

Rating: 5/5 stars 

Brief Summary

Good Stocks Cheap dives deep into value investing. The book also teaches portfolio building and how to take advantage of value investing by identifying good, cheap stocks. Some of the aspects covered by this book include fundamental analysis of companies, looking at a company’s value relative to its stock price, zeroing in on the right price to buy stocks in a successful company and how to hold good stocks amid market turbulence.

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• Audiobook: Free with Audible Trial

5. The Truth About Your Future by Ric Edelman

Book Details

Rating: 4.5/5 stars

Brief Summary

The Truth About Your Future discusses the all-pervasive potential of science and technology, and the role it is likely to have in the fields of investment, personal finance and money management. It is a futuristic take on how science and technology will reshape the world. It’s a good read for anyone interested in learning how to adapt to the constantly evolving financial landscape. 

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• Audiobook: Free with Audible Trial

6. Money Machine: The Surprisingly Simple Power of Value Investing by Gary Smith

Book Details

Rating: 3.8/5 stars

Brief Summary

There is no shortcut to success, and speculation is not the right way to chase profits. Money Machine emphasizes these themes and advocates the time-tested concept of value investing to generate better returns. The book teaches investors how to calculate the intrinsic value of a security, use ratios such as P/E and dividend/price ratios and the Bogle and Shiller models, assess the investment worthiness of a stock using the cash flow it generates and how to identify asset price bubbles.

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• Kindle: Buy it now
• Audiobook: Free with Audible Trial

7. Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond by Chris Burniske and Jack Tatar

Book Details

Rating: 4.5 out of 5 stars

Brief Summary

Naturally, investors gravitate toward crypto assets now, since these digital currencies have been generating staggering returns. Cryptoassets, co-authored by Chris Burniske and Jack Tatar, gives a simple and effective presentation on this investment avenue.

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• Audiobook: Free with Audible Trial

8. Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing by Joel Tillinghast

Book Details

Rating: 4.2/5 stars

Brief Summary

In Big Money Thinks Small, fund manager Joel Tillinghast underlines some common investing mistakes, such as trading based on incomplete information, adopting a herd mentality, etc which makes it one of the best stock market books. While explaining these mistakes, Tillinghast also details how an investor fixes them, and quickly. This, according to the author, can be achieved by following a few steps, including avoiding investments you don’t understand, steering clearing of murky investments and focusing on underpriced stocks.

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• Hardcover: Buy it now
• Kindle: Buy it now
• Audiobook: Free with Audible Trial

The post Best Investing Books by Shanthi Rexaline appeared first on Benzinga. Visit Benzinga to get more great content like this.