BECOME A STAY-AT- HOME PARENT INVESTOR
Hello, my Business-Minded Moms! This the post just for you. Andrew from slickbucks.com is here to empower you with helpful strategies that will get you investing!
There are few things more rewarding than being a parent. However, if you are the one who stays at home to take care of your son or daughter, it may limit the opportunities that you have to make money.
Fortunately, any stay-at-home mother or father can learn what it takes to become a successful investor. When done correctly, you can indulge in a hobby while helping to secure your financial future.
Will You Be a Trader or An Investor?
The first big decision that you have to make when putting money into the stock market is whether you want to be a trader or a successful investor.
A trader is someone who holds a position for a period of several days. A day trader is someone who only stays in a position for several minutes or hours with the intent of buying and selling the small moves a stock will make each day.
An investor is someone who takes an interest in the long-term growth of an equity. While a trader generally doesn’t care what stock he or she buys or sells, an investor is more selective of what he or she buys.
Those who are looking for income may want to invest in dividend stocks that are generally paid out every month or quarter.
Dividend Stocks May Increase Overall Return
Stocks that are labeled as dividend aristocrats have increased their dividend each year for the last 50 years. This makes it more likely that they will continue to pay out a dividend on a monthly or quarterly basis for the rest of your life.
Companies such as Coke or Target have earned this distinction, and overall, companies that offer a dividend have returned roughly 11 percent per year on average.
If you choose to invest in stocks that offer dividends, be sure not to invest solely based on the dividend yield. While a 10 percent dividend is much larger than any return you will see for a typical stock or bond, it generally means that the company offering it is on shaky ground and needs to overpay to attract investors.
Join a Trading Community
Whether you choose to be a trader or investor, it is important to understand that the price of a commodity is based on little more than sentiment. While technical analysis of a market can give you clues as to where it may be headed, the stock market is nothing more than an auction among millions of people each day.
It is possible that the market will go up after a terrible jobs report just as it could go down after a reported drop in unemployment. By joining a trading community, you get the insight of hundreds or thousands of people who are all seeing the same data and using the same charts.
This will make it easier to both learn how to read a chart and understand why the market tends to move in predictable patterns.
Learn the 80 Percent Rule
If you consider yourself a trader, you will need to know about the 80 Percent Rule. On any given chart, there will be a value area where most of the day’s volume is centered. If prices come outside of that area, go back into that area and stay there, that price has an 80 percent chance of going to the other side of the value area.
Long-term investors may also be able to take advantage of this because they can gain valuable insight into whether they should try to buy on a dip or wait to take profit until prices move even higher.
You Don’t Need to Spend All Day at the Computer
Parents who are looking to buy and hold stocks for the long-term don’t need to monitor their accounts for several hours a day. Instead, they may be better off taking a few days looking for news reports or anything else that could impact their stock’s price over the next few hours or days.
If there is nothing important going on, you can get away with allowing the trading day to go on without your oversight. Staying away from the computer makes it less likely that you will react to a sudden drop in prices by selling your shares or a sudden increase in prices by buying more.
In the event that you have a strategic reason for buying or selling at a certain level, you may be able to setup working orders that will fill when prices hit a predetermined level.
Most working orders will cancel at the end of the day, which means that you don’t have to worry about those orders filling at a later date because you forgot to exit out of it.
Fit Your Trading Around Your Schedule
Ultimately, technology allows you to be both a good trader and a good parent as you can fit your trading day around your schedule.
Those who can’t trade during the New York session should look to after-hours trading that lasts until 8 p.m. as well as early morning trading that starts at 4:30 a.m. Futures markets and foreign exchanges are also open overnight and early in the morning.
Have the Kids Help With the Trading
If you have older children or teenagers, they may be able to play an active role in your trading day. While they may not actually make buying or selling decisions for you, they could help by alerting you to any news that they may have heard about a company or product.
This could provide insight into where that company’ stock may being going. Having your children help in this way make alert you to trends in clothing, electronics or other sectors that you may not follow on your own.
From there, you can make trading decisions in advance based on price targets and other research that you have done to confirm your ideas.
Those who choose to stay at home to raise their children don’t have to play a passive role when it comes to earning money to support them. All you need is a little bit of money, an internet connection and the willingness to learn to be great at both parenting and investing at the same time.
Andrew is the editor-in-chief of SlickBucks.com which strives towards helping folks learn to manage money more cleverly and improve their wealth by investing and saving money. For that, Andrew shares useful tips and tricks that help both novice investors and seasoned traders alike.