This Article is About
stock market
blue chip stocks
investing in the stock market
value stocks
buy stocks
what this means
5 Ways To Invest In The Stock Market
Join 1000's of Authors at StreetArticles Today!

5 Ways to Invest In the Stock Market

Most people only know of one way to make money in the stock market. That way is to find a company you like for whatever reason, buy their stock and hold it until you retire.

If you know of other ways to make money in the stock market then you most likely know more than the average stock market investor.

I'm going to share 5 unique ways to invest in the stock market and hopefully this will either reinforce what you already know or expose you to some new methods of investing.

Buy Stocks That Pay Dividends

Publicly traded companies use dividends as a way to reward their shareholders. Dividends are usually based on the amount of shares you own in a particular company.

For example a company may pay $0.20 per share so the more shares you own, the bigger your payout will be.

Not all companies pay dividends so if you wanted to take advantage of this strategy you would have to do some stock screening.

Buy Defensive Stocks

Defensive stocks usually fall into certain industries. These would be industries that sell products that people need to survive.

What this means is that no matter how weak an economy gets these stocks would still be able to weather the storm.

For this reason they are considered defensive, as they defend your portfolio against a weak economy.

Some industries would be food, utilities, gold, silver, and some pharmaceutical companies.

Defensive stocks are a good way to go because they also do well in a good economy.

Buy Blue Chip Stocks

This is also considered "value investing" in the stock market. Blue chip stocks are all about companies that have a strong balance sheet.

Most of the thirty stocks in the DOW jones industrial index are considered blue chip or value stocks.

Although the DOW is only made up of around 30 stocks it is meant to represent the overal market. Because of this, only the best stocks make it to the list.

Start with the thirty stocks on the DOW, and do some stock screening from there to find the best of the best.

Note: Blue chip stocks usually have a big market capitalization, meaning a lot of shares outstanding.

Short Selling

Short selling is not a commonly known trading method but it is very popular among savvy investors.

Short selling is a way by which you sell a security first, then buy back later at a lower price.

So with short selling you are still buying low and selling high, but the order is just reversed in that you sell first and buy later.

Short selling is an excellent way to make money if you think that the stock market (or even an individual stock) is going down.

Trading Options

This last one is my personal favorite and is my primary way of making money inthe stock market.

Stock options give you the right to buy and sell stocks at a certain price no matter what happens to the stock itself.

In other words if you owned a $45 option on xyz stock you would be able to buy or sell xyz at $45 no matter what price xyz was trading at.

If xyz was trading at $25 dollars, you could still sell it at $45.

People buy and sell options just like they buy and sell stocks, I use various options trading techniques when investing in the stock market.

I have found that learning how to trade options is truly one of the most lucrative ways to make money in the stock market.


Street Talk

Spot on ,Dale !

Reply
  about 8 years ago

Hi Dale Great article with some good information. I am interested in the market myself but did not know how to learn. I look forward to your next article. Also, I will check out your other articles especially if they are about this same subject.

Reply
  about 9 years ago

Thanks Stephanie I am glad you liked the information. Feel free to check out my website as well for more info. Also, if you have any questions on anything I covered (or did not cover) let me know and I will be glad to answer it for you.

Reply
  about 9 years ago
You May Also Like
Forex Vs Stock Market – What Is the Better Choice
Forex has gradually picked up with small investors who dream of making it big with small capital. In the race between Forex vs stock market, foreign exchange trading definitely has a decisive leading edge over the later. Forex market is highly liquid with single day trading going well above four…
By: Prav Garg in  Finance  >  Currency Trading   Jul 26, 2012  
0
  Likes: 1

Where is the Stock Market Heading?
The stock market has been on a crazy ride lately. With large ups and sharp downs in stock market prices, it's hard to know from day to day where the market is heading. I want to begin by asking that you don't make any decisions based on what I say. I'm an…
By: JR Cooper in  Investing  >  Stocks   Sep 21, 2011  
0
  Likes: 0

Go For It
A couple of years ago I used to have a subscription to Kipplingers magazine. Kipplingers was and I say was because I don't know if it is still in circulation, a magazine that would update you on current stocks and mutual funds they would let you know whats hot and…
By: C.A. Hillman in  Investing  >  Stocks   Apr 26, 2012  
1
  Likes: 3

Seed Starting Cats
What do cats have to do with starting seeds indoors? We have cats. We have a lot of cats. Indoor and outdoor cats. We have cute cats, ugly cats, soft and cuddly cats, purring cats, hissing cats, and we have good and bad cats. One characteristic all our cats have…
By: Robert Pummer in  Home and Family  >  Gardening   Jan 23, 2012  
1
  Likes: 5

How I Could Have Been A Millionaire – But I Didn’t And You Can!
It hit me after 50 years of living. I wish it had hit me when I was 24 years old, the time I started working. In fact, it is so simple. Anyway, at least let me tell you all the mistakes I made, so you could be wiser. Especially you…
By: R. Ravirajan in  Self Improvement  >  Abundance Prosperity   Jan 04, 2012  
0
  Likes: 0

Smart Investing Tips to Gain Copious Returns From SIP
If you would consult a financial planner for knowing the best way to invest and earn money, then the definite answer would be to adopt an investment strategy which is regular and long-term. The clients should choose a bouquet of top performing schemes according to their risk profile and have…
By: Dishika Baheti in  Investing  >  Mutual Funds   Jun 07, 2016  
0
  Likes: 0

Risk Profiling : A Mixture Of Art And Science
Any investing strategy involves a prominent factor which influences the investing decision to a great extent which is the risk factor. The clients have to be extra cautious while spotting the correct avenue for putting their money in order to get maximum profit from it. Each client has different investing…
By: Dishika Baheti in  Investing  >  Mutual Funds   Jun 06, 2016  
0
  Likes: 0

Elss : Encompassing Investments With Tax Saving
The financial year 2015-16 has ended and with that, the tax paying deadline is also over. It is often observed that the clients pursue the tax saving plans by the end of the year, i.e., in February or March. It may have helped you till now, but it is a…
By: Dishika Baheti in  Investing  >  Day Trading   May 18, 2016  
0
  Likes: 0

Problems Addressed By An Efficient Portfolio Management System
Portfolio management is an endeavor that requires an understanding of investment mix and policy, asset allocation for individuals and organizations, risk mitigation, and performance optimization. And by investing in cutting-edge portfolio management system, many businesses are able to accomplish these efficiently. Advanced accounting software is already required as one’s practice…
By: Cheryl Muncher in  Investing  >  Mutual Funds   May 17, 2016  
0
  Likes: 0

Absorbing to See A Bisected Brawl Hemisphere
In adjustment to anatomy an all-embracing and avant-garde address market, Linqing city-limits affairs to body a Address Fair & Exhibition City-limits which will awning a absolute breadth of four hundred thousand aboveboard meters. The absolute investment is about 0.58 billion RMB. This Concrete Wedge Anchors intends to complete this activity…
By: plasticproducts in  Investing   May 09, 2016  
0
  Likes: 0

Some Extra Fundamentals on Legal Documents - Realizing the Tits And Bits
Any company is incomplete devoid of legal documents. The legal documents hold the authenticity in the company and therefore a little of detail need to not be missed out. Almost everything that matters for the preparation on the legal document of a company must be sincerely followed to mitigate future…
By: daniel huang in  Investing  >  Mutual Funds   May 06, 2016  
0
  Likes: 0

Free Cisco 648 - 244 Pdf Download (may 2016)
1. Convenient and effective 2. Excellent supplier for busy workers Several. Interactive testing engine 4. Printable Pdf forms A few. Online technical help in case of difficulty Half a dozen. Instant download access after purchase 7. Simulates genuine exam environment 8. Self-paced research course 9. Regularly updated 648-244 answers exam…
By: certone in  Investing  >  Futures and Commodities   May 04, 2016  
0
  Likes: 0

How to Choose A Broker for Day Trading
Day trading is the practice of holding positions in a financial market for no longer than a single day, and often for much shorter periods of time. Day traders always exit any trade before the end of the trading day (often referred to as the 'regular cash session'), and aim…
By: Alexander Pearson in  Investing  >  Day Trading   Apr 27, 2016  
0
  Likes: 0

L&t Mutual Fund: Piloting the Flight Of Investment
Imagine a situation where you are traveling through a plane and the pilot is unable to navigate the flight. It is fearsome for the passengers as they have trusted the aviation company and boarded the flight. Travelers put their lives at stake and confide in the staff, that they will…
By: Dishika Baheti in  Investing  >  Mutual Funds   Apr 27, 2016  
0
  Likes: 0

Fundamentals Of A Company Check - What Would Be the Services Employed
Business planet is cool as well as risky. The deeper you enter, the a lot more threat you get into. Nevertheless a systematic approach generally assists to collect the puzzle and stroll straight. Investing into a company could be helpful should you go through a meticulous company check. All strings…
By: daniel huang in  Investing  >  Day Trading   Apr 26, 2016  
0
  Likes: 0

Article Views: 2031    Report this Article