What is the point of negative interest rates?

The economic uncertainty triggered by the coronavirus pandemic has led people to be more cautious with their money. Central Banks adjust interest rates to stabilize economic growth and this is how… 

What are Negative Interest Rates?

A positive interest rate is the extra money you receive from your bank, where a negative interest rate means you lose money  from holding it in a bank. This charge or cost for the lender is rare and for some people, they’re unheard of. But negative interest rates play a key role in stabilizing economic growth.

With the global pandemic going strong, interest rates have been dropping as decision-makers have been focusing on limited economic damage. Currently zero-percent interest rates are common, but with the virus here to stay, will central banks have to push interest rates to go negative to boost growth and prosperity and tackle rising unemployment rates? Central banks use interest rates to control inflation by adjusting the cost of money with the goal of keeping the economy running at the optimum level. If economic growth and inflation need to be checked then interest rates will be elevated, whereas if growth and inflation are below the central banks targets interest rates will be lowered to give the economy a boost. At lower interest rates, the cost of borrowing is lowered to encourage spending and inject life in the economy, while raising interest rates stagnate spending to control the rate of growth. 

Examples across the World

Negative interest rates are rare but not unfamiliar to the most prosperous economies of the world, including Switzerland, Denmark and Japan. This means it costs banks to deposit money with central banks and as a result consumer banks will encourage loans at low cost to the public to counter the cost of depositing money in central banks. 

Central banks worldwide are considering pushing interest rates into the negative to boost spending to counter the effects of COVID-19. However, central banks have other tools apart from interest rates in their armery which can boost the economy without costing those who want to save. For example, they can increase quantitative easing to improve liquidity. 

What’s bad about negative interest rates?

Positive interest rates supports the banking sector as it supports profit from loaning to the public. Public banks are at risk when negative interest rates are employed as it lowers their turnover.

Another issue is the failure to see positive results from adjusting interest rates. The aim of slashing interest rates is to boost growth and inflation by encouraging consumer spending. However, this cannot overcome personal finance problems due to higher employment rates and uncertainty brought by coronavirus, which lends people to be more conservative with their money, no matter what strategy central banks impose. This would mean there is little economic growth despite encouragement from central banks to inject money in the economy.

There is still dispute over the effectiveness of negative interest rates as other monetary tools are implemented to boost market liquidity when inflation and growth are lacking. Introducing negative interest rates is a fallback for unsuccessful measures, hinting at the extremeness of the economic crisis. A lot of countries’ central banks will be faced with this dilemma as other monetary tools prove ineffective.

What does this mean for the stock market?

The stock market is the most rapid to react to changes in interest rates. Companies are affected by bank rates directly, so as interest rates drop they can afford to take out loans that will encourage growth. Economic growth for a company boosts stock prices. However, companies are also affected indirectly, as lower interest rates encourage spending of disposable income, revenues will be boosted, in turn, increasing stock prices. 

The change in interest rates causes volatility and therefore rapid changes in stock prices. Traders can take advantage of this market change as initial changes in stock price are smoothed or rebounded over time. Furthermore, the premonition of interest rate changes is enough to cause volatility as traders project changes to the stock market ahead of central bank announcements. Traders often keep a close eye on an economic calendar which clocks announcements that influence the stock market in order to predict events and make a profit. 

Although volatility creates opportunity for profit, there is also increased risk. So be careful and keep up to date with the latest economic news with BullBear

Stocks to buy before 2021

Are you confused by all the market changes happening right now? Not sure who to invest in next? We provide a simple overview of what we think are the best stocks to buy in the next three months and why. 

Disclaimer: We do not claim to provide any financial advice. All content is purely for entertainment purposes only. 

Coronavirus has clouded market predictions as the uncertainty of the virus’ actions produces a highly uncertain economic outlook. Therefore, we think the best companies to invest in now are those that have weathered the storm during the 2020 lock-downs and economic hits proving their resilience to the virus. Some sectors have benefited from the virus, others will make a return in a recovery, where the most resilient have proven strong throughout. Read on to find out the sectors that should be on your watch list. 

Insurance groups

Admiral, a top UK insurance group, has benefited from the reduced insurance claims from reduced activity during lockdowns. The stock currently yields 5.4% as the company outperforms this year’s targets. Stock holders even saw an increased dividend where most dividends are becoming fewer and further between. Another UK insurance company, Direct Line have profited from the same traits, producing a prospective dividend yield at 12% of the current share price. 

Luxury Brands

Demand for luxury products and services has plummeted this year as high unemployment rates and economic uncertainty dominate. However, due to this crash analysts expect a huge resurgence in 2021 for the luxury brand market. Brands such as Burberry who have high profit margins and generous shareholder payouts are ideal to invest in as the demand for luxury brands return. During the height of the pandemic they were forced to shut their doors and sales took a significant hit, but the outlook is much brighter as luxury brands are likely to make the strongest recovery. 

Hotel Groups

Hotel groups such as InterContinental Hotels, who were forced to close their doors across the world, are likely to see a much slower recovery to pre-covid traffic. As one of the largest hotel groups globally, InterContinental Hotels are likely to make it through the uncertainty brought by COVD-19. Similar to the luxury brand sector mentioned above, the hotel industry is likely to make a huge return during economic recovery as people begin to travel again. Watch out for a merger with Accor, a European hotel group, as this would push the group to the largest in the hotels industry. The merger would reduce costs through economies of scale and increase returns for investors making them an even stronger investment opportunity.

The Resistance of Technology

As we switch to more online and remote activities, companies that support this are booming, Many of you have been following the movements of Amazon over the pandemic. This mega company will produce consistency and resilience in the face of COVID-19 due to its dominating and somewhat essential services.

Technology companies deserve the medal for coming through the pandemic the strongest with Apple, Alphabet, Salesforce, Zoom and Microsoft providing consistent revenues supporting the new remote working workforce. For example, Zoom has grown by over 620% since going public in spring 2019 and Salesforce’s perfect position to support the increase in cloud based storage and online shopping during the pandemic is here to stay.  As companies see the benefits of working from home these tech giants, which enable productive remote working, will continue to turnover huge profits which make them a safe investment through 2021. Alphabet holds 28% of the digital ad market and is  growing their cloud based sector as it continues to offer robust solutions to technological problems. You won’t see Google disappearing off the horizon any time soon…

As the stock markets are so unstable, there lies a wealth of opportunity to take advantage of this! Consider following our recommendations and investing in companies with a bright future beyond coronavirus. Keep up to date with the latest news here.  

Remote Trading | The Next Normal

In our last article we discussed the difficulties of switching to trading remotely under COVID-19, but it’s not all doom and gloom! The switch to remote working has led to a huge increase in digital nomads. Why stay in dingy England when you can fly to a beach-side villa and be just as productive? Cue WFA’s (work from anywhere) employees, who since the pandemic have substituted their usual routines for those of travel-brochure worthy locations. No longer are digital nomads niche, some even say they are the next normal…

Anyone, from any age or location can trade nowadays. Traders who are just starting off their careers can have flexibility whilst they start up. For many, companies are extending their work from home policies through 2020 and some through 2021! If you’ve been waiting for a long trip abroad but have always been restricted by work, now is the time. Forward-thinking companies and the younger workforce have been quick to adopt the WFA lifestyle with employees at remote locations across the globe, all connected online. 

Some nations are encouraging foreigners to work remotely to boost their local economies. Destinations such as Barbados, Estonia and Georgia are among those introducing new visas to encourage digital nomads. You may think in the midst of a pandemic it is not wise to travel… But statistics show people are taking much longer trips abroad to make the headache of travelling under Corona worthwhile. Combining a holiday and work may be the perfect solution to satisfy your travel cravings. Perhaps Barbados is a little exotic for you, don’t threat, there has been a boom in the use of long-let AirBnB’s and communal work spaces, such as WeWork, across Europe as people are banned from their own offices. Ever wanted to live in Paris? Warsaw? Amsterdam?

Does trading suit the laptop lifestyle?

As a trader you can be your own boss, working for yourself and managing your own time. It can also mean some weeks you focus on certain markets and the next you can change, the structure is up to you! And hey, if you want a day off to enjoy the gorgeous weather or special cultural event you can do that too. Remote trading has the security of having a market that is always there and always possible to make profit on, no matter how much COVID-19 has wrecked the economy whilst having the flexibility of accessing markets 24/7.

A hot field for trading remotely is proprietary trading. This way you can treat your portfolio like a self-funded account, except you don’t have to take the hit of losses. This no-risk trading format is very popular for forex traders and those who want a little more freedom. The fund takes any losses while you take home all the profits. Sounds too good to be true? Proprietary fund trading can do this as there is no broker taking a cut or willing you to lose to make their own profits, instead remote proprietary trading funds act as a client of the broker to protect forex traders from losses. This is suitable for beginners and experts alike for different reasons, but in the end it all comes down to low risk, high reward!

What once seemed like a pipe-dream to work and live in the hottest of destinations has now become a viable option. Joining the WFA community means you can work by day to fund your nights! Want to learn to trade? Check out BullBear, where anyone can become a successful trader. 

Remote Trading | The New Normal

For most office workers being forced to work remotely has proven successful. But not for financial traders where communication, technical and compliance issues can make trading from home a nightmare! While casual and individually funded traders have been having a holiday, traders from large corporations have really struggled…

“The mass relocation of a significant fraction of market making . . . has almost no historical precedent in terms of its reach or scale, with the exception of 2001,” said Joshua Younger, an analyst at JPMorgan. “Liquidity overall could also suffer, with some signs of emergent stress . . . in even benchmark Treasuries.” 

In New York, one bank kept its trading floor open despite a worker testing positive for COVID-19. Adjusting to working from home has been difficult for many, but it has been a real headache for the 90% of traders who have been relocated. While some traders have been sent home, others are redeployed to back-up sites in satellite towns or put on an office rotation. For the U.S, the coronavirus pandemic is looking to be the greatest physical infrastructure challenge facing traders since 9/11. 

The Challenges

Trading floors are set up with announcements, compliance checks and all the tech traders could possibly need to be efficient. The hashtag #ronarigs soared as traders improvised trading setups at home with computers, monitors and remote access all wired to traders’ living rooms. But this hasn’t been the biggest issue, at banks information is synchronised at exactly the same time as the server to avoid delay. At home trading faces the challenge of minute delays that can make the world of difference when a millisecond can cost thousands for scalp traders. 

A problem the average Joe may not consider is communication. Working remotely has caused all sorts of communication issues such as organisational fragmentation that can lead to dysfunction and markets can become less and less effective. As a result dramatic volatility in equity and bond prices means liquidity may suffer and an economic crash may be on the horizon. Adding to that is the difficulty of companies to enforce compliance standards when traders are no longer at desks with recorded phone lines and under close supervision. Monitoring market abuse has been particularly challenging at home where traders have more freedom, access to personal devices and the interruption of family members in earshot of sensitive information. All of which are completely against compliance regulations. 

So what are organisations doing to monitor compliance?

Firms can carry out a work station assessment to judge the privacy of their trading, including details of cohabitees, such as name and company. Firms have also been introducing innovative technologies to monitor trading sessions, including audio visual monitoring and door opening detection. IS this sacrifice of personal privacy for company privacy something you agree with? 

Some firms are switching more to automation to regulate orders and reduce human interaction. Not only does these AI technologies improve efficiency but mean companies are less reliant on human communication and possible errors. Although this transgression to financial technology has been growing, COVID-19 has boosted the use of AI and other technologies more than anyone could’ve predicted. Despite this being a huge advancement for trading organisations it puts workers livelihoods at risk at a time of great uncertainty. 

Join the discussion here and follow us to keep up to date with the latest stock market news and debates. 

Choosing the Best Broker for You

To trade online you need to select a broker who can execute trades and manage your account for you. Brokers offer a variety of account types and services so it is best to research which broker is the right fit for you dependant on your investing goals, educational needs and experience. Here we will take you through all the things you need to select the right broker for you. We even include an easy to use comparison table!

Choosing the best online stock broker can make the difference from an easy and exciting new experience trading to a constant frustration and disappointment. Accessing financial markets through online brokers is easy and inexpensive but there are so many out there tailored to a different sort of customer, how could you ever choose? With our help choose the right broker to optimise your user experience AND profits. 

What do you need?

Take some time to think what is most important to you when trading and be frank with yourself about your experience level and how much education and support you will need throughout your trading journey. If you’re a beginner, look for low fees and easy access to support, including tutorials and training videos on broker platforms. Whereas, if you are experienced, check what advanced features the broker provides, including data analysis tools and professional investment resources. 

Consider the following things to help judge your personal needs:

  • Are you an active or passive investor?
    • Do you want to be hands on, adjusting your portfolio with loads of trades each day or do you want to hold some long-term positions with little day-to-day activity?
  • What type of investments do you want to trade?
    • Different platforms are suited to different types of trading better than others. Will you trade stocks, mutual funds, ETFS? Or if you’re more experienced, are you interested in options trading, futures trading or fixed-income securities? For an experienced trader, getting the right broker means you may mean you will need to pay a little more but it’ll be worth it in the long run!
  • How much help do you need?
    • Do you want to plan and trade yourself, learning how to interpret charts and data? Or would you prefer to hire an expert who can manage your portfolio for you? Do you need plenty of access to support services or do you already know what you’re doing?
  • What are your investment goals?
    • Are you intending to supplement your regular income or make trading your day job? Are you trading to spend now or saving for retirement or children?

If you’re just starting out we recommend eToro and easyMarkets for their easy to use interfaces and fee -ree trading!

What makes a good broker?

Check these last things before committing to a broker!

A good stock broker in the UK is regulated by financial bodies such as The Financial Conduct Authority (FCA) to protect consumers and keep the industry in check. Look out for regulating authorities to ensure your broker is safe and fair to use. 

Check what security measures your broker puts in place to ensure you and your data are being protected such as two-factor authentication, cookies and third party rules. 

The broker should be able to provide the right services for you whilst suiting your budget. A small premium is justifiable if the platform offers features you need. So look at the costs of different account activities to judge which broker works best for you. 

  • Opening account fee
  • Deposit minimum
  • Account maintenance fees – monthly/annual
  • Included access to trading platform
  • Trading commissions 
  • Advisory services

A great feature most brokers provide is running a demo mode so you can test out the platform before you commit or upgrade to a premium service. So give a few brokers a test drive, test the usability and any special features before you commit!

Now you know how to choose the best broker for you, what brokers are out there?

eToro and easyMarkets state that 75 % of retail investors lose their money when trading CFDs. Trading 212 state that 76 % of retail investors lose their money when trading CFDs. DeGiro provide a detailed ‘The risks of investing’ page here. You should consider whether you can afford to take the high risk of losing your money.

We recommend eToro and easyMarkets for beginners. Kickstart your trading journey with BullBear now.

Trading 101: Stop Loss & Take Profit Orders

If you’ve never heard of a Stop Loss or Take Profit order or if you’re not sure how to use them order read on… These tools are essential to trading successfully as they help you exit the market at a predetermined price. Putting in Stop Loss and Take Profit orders should be done for every trade you make to ensure you control the outcome of a position by capping your losses at a price you are comfortable with. 

Financial markets can go up and down like a rollercoaster and can fluctuate faster than you could possibly handle manually. Setting up Stop Loss and Take Profit orders means you don’t have to keep such a close eye on your positions, giving you time to manage more positions at once! These tools can close the trade whilst in profit or before they sustain excessive losses. It’s a safety net that a beginner trader can’t refuse.

What are Stop Loss orders?

A Stop Loss is a predetermined level for a trade to be closed to avoid extreme losses. This can be set up when opening a position and adjusted afterwards, if so required, on most trading platforms. 

Through analysing the trend and volatility of the asset you are planning to trade and incorporating your personal risk/reward policy, you can decide where to mark the Stop Loss. For a buy order, where you hope the stock price will rise, putting the Stop Loss a little below your entry point will close the position automatically if the position goes down instead of up, preventing a loss. Similarly you can put the Stop Loss a few pips above the current price for a Sell order.

What are Take Profit orders?

Take Profit orders automatically close a trade when a certain profit level has been reached. You might think why do I need a Take Profit order if I have a Stop Loss in place? A Take Profit is essential to lock in profits when markets are moving fast. For example, if the stock falls after a peak within a short time frame, you may be exiting on a Stop Loss and have lost out on profits when just a minute ago you would’ve come away with a profit. A market can move in the opposite direction at any time to it’s best to be prepared and take a profit that is sensible.

Do you always need them?

These orders provide a failsafe protective measure against market volatility. However, you must consider the length you trade. A scalp trader would be foolish not to use Stop Loss and Take Profit orders due to the sharp unpredictability of short trades. Whereas a position trader would benefit from having less conservative Stop Loss and Take Profit orders or none altogether to ride out the fluctuations within the market to achieve a profit long-term. Furthermore, these protective measures take emotions out of the equation giving a logical way to trade that will provide predictability and profit. Using these tools means you don’t need to babysit your positions so closely and then have more time to focus on the bigger picture. 

The only negative with using Stop Loss and Take Profit orders is the position could be closed prematurely costing you potential profit, if the market continued to rise or if it was to bounce back from a loss. To maximise profit and keep premature closes to a minimum, carefully consider the support and resistance levels you are relying on and always ensure these are upto date.

So there you have it! Everything you need to know about Stop Loss and Take Profit orders. If you want to learn more we offer a variety of online courses and workshops which you can check out here. Or if you’re ready to give it a go risk free, our app has games, quizzes and much more so you can practice trading without the worry of losing money.

Stimulus Shocks Stocks

Stocks fell after a six-week high reversing a coronavirus recovery. Traders are no longer waiting for an agreement for the U.S. stimulus as it is expected the coronavirus aid package will be introduced after the November election. The International Monetary Fund warned an economic recovery will not be smooth until the virus is tamed as they prepare an annual meeting with the World Bank to discuss the worst economic recession since the Great Depression. 

Traders are boosting their stock purchases in anticipation for a consensus on the new coronavirus aid package. There is a disagreement between the Democrat proposed relief package and the administration, despite Trump upping his counteroffer to $1.8 trillion to compromise on the Democrat’s $2.2 trillion proposal for the relief package. Trump proposed using leftover funds from the now expired Paycheck Protection Program to fund the basic package to help businesses and individuals survive coronavirus’ economic destruction. The U.S. dollar index is down 0.07% at 93.045 [USD/] due to this uncertainty. 

However, talks are scheduled this week to come to an agreement and move forward and only then will we see the stock market getting back on track. Hopes that Joe Biden will win the U.S. presidential election increase the likelihood of a big stimulus package being implemented. Wall Street’s main indexes opened higher this week as optimism about the fiscal stimulus deal prevails. 

What’s hot and what’s not?

Here’s the latest news and what to watch out for today!

Apple Inc is due to announce their new iPhone today which has boosted technology stocks with shares in Apple surging 6.4%. 

China are recovering from pandemic damages with exports rising 9.9% and imports switching to positive as reports from September become public.

As Europe continues to introduce harsher coronavirus measures there is an expected decrease in demand for oil. Furthermore, Norway’s strike affecting oil production has been lifted along with Libya’s largest oilfield restarting production. As a consequence, many stocks in the energy sector are losing ground in premarket trading. 

Johnson & Johnson have announced they are pausing their COVID-19 clinical trials due to an unexplained illness of a study participant. This happened after AstraZeneca paused their late-stage trials for a vaccine in September due to similar reasons. 

Keep up to date with the latest stock market news with BullBear

Trading 101: Trading Pyschology

To trade successfully you not only need the trading know how but to understand your own strengths and weaknesses when it comes to trading psychology. Acting rationally and containing your emotions is key to allow you to think quickly and clearly to make profitable trades. Trading psychology is different for each trader and based on personal reactions to risk and rewards and tendencies to be emotional. 

Take some time to identify your personality traits. It is important to recognise your strengths and weaknesses early on so that you can tailor your trading style appropriately. What are your tendencies to react calmly and logically in a stressful or high stakes situation? Do you tend to get angry or frustrated when things go wrong and you let your emotions take over?

Patience

Take emotion out of the decision and be patient when deciding to open or close a position so you don’t miss out on profit. You must think logically, using your knowledge and trust your analysis when is the most opportune moment to act. 

Quick decisions

Depending on trading style you will need to think fast and make snap decisions to enter and exit positions to keep your trades profitable. You need the discipline to keep to your trading plans and be prepared to log losses as well as profits to track your progress. You must not be disheartened if you lose, after all, everyone makes mistakes and it is just part of the learning curve to become a successful trader. 

Fear

Fear is a natural reaction to a threat, in this case, losing money, When stocks start to fall or there is a likely economic downturn you must keep your cool. The internal alarm bells that ring and prompt you to close your positions and to take no more risks might seem like the best thing to do. When in reality, liquidating holdings too quickly could cause you to miss out in the long run. It is good to prepare for these events and plan the best strategy to mitigate loss. Trading is risky, but the bigger the risk, the higher the reward. 

Greed

When a position is rising it is tempting to keep holding on to just get a little more profit. But you have to be aware that acting rationally will reap far more success than acting on instincts or emotions. A rising trend may look good, but there is always the risk that the trend reverses and stocks crash and for the sake of waiting for a few extra ticks, it is better to pull out.

Setting yourself rules

By setting out clear guidelines based on your risk-reward tolerance you can take emotion out of the equation when deciding when to enter and exit a position. You can set limits on profits and losses each day or week to ensure you don’t get carried away and can start again another day. It is best to constantly review your rules depending on your trading results so you can finesse your personal strategy

Trading Styles

Setting a trading plan to suit your strengths and weaknesses will keep you on the road to success. You can also tailor your trading style to your personality traits to ensure trading is exciting, fun and profitable for you. There are many different strategies for trading which are characterised by trading styles. Trading styles depend on the period the position is held and suit different personality traits. The four main categories are:

  • Position trading: where positions are held medium term – upto a year
  • Swing trading: where positions are held from days to weeks
  • Day trading: positions are open and shut within the same day.
  • Scalp trading: positions are only held temporarily – from seconds to minutes

The amount of capital, time and experience that a trader is able to invest will determine the best trading style for them. It can be difficult to choose the trading style that suits you best, it really depends on your personality! 

  • Position trading is best suited to people who can hold their own no matter if there is turbulence because of the time position trades are held, you must hold your ground through turbulent and fluctuating periods. 
  • Swing traders are patient people who can keep calm when a trade isn’t performing as there are much greater stop losses than for day trading. 
  • Day traders are often people who cannot sleep knowing a task isn’t done. If you are someone who struggles to clear their mind when the sun goes down then day trading may be the best for you. 
  • Scalping is best suited to active traders that are good at making quick decisions, this is to optimize profit and prevent losses as remember those trades can change rapidly. You need to be focused to be successful at this trading style. 

So now you understand the basics of trading psychology and how you can suit trading to you!  If you want to learn more we offer an online course hosted by London’s top trading educator that goes into more depth so that you can really understand your own trading psychology,  here

Trading 101: What is trading?

If you want to learn all about trading you’ve come to the right place. Welcome to our Trading 101 series! Here we will teach you everything you need to get started in the world of trading. We will start off with the absolute basics and move on from there, so if you are a complete beginner or just want to learn more, don’t worry, we’ve got you covered. 

The principles

Trading in the financial markets is not too different from what you do everyday as a consumer, the principles are no different. Trading is simply the exchange of money for goods. Say you want a snack (the demand), so you buy a banana from a market stall (the supply), here you trade your money for something you want. And if people were wanting more bananas (perhaps because of a news article about their health benefit), the stall owner would increase the price to match the price the consumer is willing to pay, this is called market price

You can buy and sell much more than fruit in financial markets, including stocks, commodities, currency pairs or other instruments. When you buy a share, you are buying a small part of that company. Someone who has bought a stock is a shareholder and is fundamentally investing in that company’s future for as long as they hold stock.

When you put in a buy order you then hold a position until you close it through a sell order. In these markets, someone who trades shares is buying a share because they think the company has potential, they then sell this if the company gains value to take home the difference as profit. You can also do the opposite by selling at a high price and buying at  a lower price to generate gain in a falling market, this is selling short

As you have to buy and sell stocks through an exchange, you must use a broker, which is a person who is licensed to trade stocks through an exchange. Many brokers nowadays are smart computers that buy and sell orders for people around the world at a million per second. Be aware that most brokers take a commission on orders so check thoroughly which brokers are reputable and fit with your budget and trading style – we recommend some here

What changes the market price?

A change in the reputation of a company alters how the public value it and therefore change the price of a share. This can happen for a variety of reasons: a company may be performing well, paying out good dividends or recent news may affect the company’s value. The  better the public views a company, the more people there are who want to buy shares, increasing the demand and pushing up the price of those shares. Trading takes advantage of this change in share price.

Why do companies sell stocks?

The first time a company offers shares in the stock market, they are going public, this is called an initial public offering (IPO). Companies will do this to raise capital from public investors whilst simultaneously offering an exit strategy for founders and early investors. 

When a company is doing well,  they can choose to share some of their profit with their stakeholders as a dividend. Trading with income stocks will give you little rewards that depend on the company’s success and can be another profitable way to gain capital from holding stocks. This is basically a little thankyou to those who believed the company had potential and invested in them. However, not all companies choose to do this, growth stocks are those held in companies who choose to re-invest their profits instead of sharing them with stakeholders. 


So now you know the basics and can think about what trading style you’ll use! If you want to learn more we offer a variety of online courses and workshops which you can check out here. Or if you’re ready to give it a go risk free, our app has games, quizzes and much more so you can practice trading without the worry of losing money.

Why learn to trade?

Trading is something that anyone can do, young…old…from football fanatic to wine connoisseur…postal worker or politician. Seriously, anyone can give it a go. Here we will take you through some of the most attractive things about trading to motivate you! 

A small disclaimer… Don’t confuse trading with a ‘get rich quick’ scheme. Frankly there is no such thing! Trading takes time and effort and a lot of learning to get you on the right track, but it is well worth the rewards. 

Something to do

I’m sure a lot of people are feeling bored at the moment with all the Coronavirus restrictions. Have you been itching for a new hobby? Well trading could be the perfect answer to your prayers. It will give you something to read about in your spare time, a sense of being connected to the world and a bit of excitement when you think of the potential. Most professionals start off trading as a hobby, it really is a fulfilling use of your free time. Would you rather be watching sitcom re-runs or learning something new that could potentially lead to profit?

The feeling

Trading successfully is empowering, you get a feeling of fulfilment and personal satisfaction from making a profit. Of course, not everyday can be so good, stocks are unpredictable after all. If you talk to a well seasoned trader they will talk about the thrill of a successful trade, there’s nothing quite like it! But it doesn’t come without careful planning.

Additional income

Naturally, one associates trading with making loads of money. And this can be true! Trading successfully can provide you with more financial freedom which will both ease your mind and mean you can enjoy more of the perks in life! It can be anything from wanting to treat your partner to a proper date night, saving for a holiday or even investing in your future. Starting off you should see trading as a supplementary income, it will take a while before you become good enough to be consistent enough to rely on trading as an income. It’s important to mention that you’ll need to invest and therefore risk your own capital, which is even more reason to take your time to learn the skills of the trade before investing real money.

Freedom

Ever seen people who live in the Bahamas and you wonder how they can afford that lifestyle? Well trading is one of those jobs you can do remotely. As long as you have a decent wifi connection you can pretty much trade from wherever you like. Pursuing trading is something that can provide you freedom, of your schedule, location and so much more. 

So hopefully you now have an idea of whether you’d like to get started with trading. For most, the draw of financial freedom and the exhilaration you feel when successful is well worth the time it takes to learn. Get kickstarted with BullBear, learn how to be a successful trader with our app and online resources.