How to build your portfolio with low cost trades?

How to build your portfolio with low cost trades?
How to build your portfolio with low cost trades?

Investment professionals at firms like SureTrader work to help their clients understand how to effectively manage their portfolios for success. Whether you are a short-term trader or a long-term investor, it’s important to understand how you want to approach the market and what steps need to be taken to achieve your goals. This type of understanding isn’t easy, and it’s precisely why having an advisor can help immensely. But sometimes, even the best planning can lead to losses.

For investors and traders who have lost money, there’s often a high amount of stress involved with getting back into the market. For people who are new, that stress is similar. SureTrader investment analysts recognize the apprehension involved in market trading and investing. For people who would otherwise remain uninvolved, they typically recommend looking into low cost trades as an investment potential.

Understanding low cost trades

Low cost trades are pretty much what they sound like – lower priced stocks that present fewer risks for investors. Generally, these come in the form of low-priced stock prices that don’t carry the financial weight of higher priced shares.

When it comes to low cost trades, there are multiple reasons why these types of bonds exist. For one, companies may have endured losses or other problems plummeting their values down to diminished rates. Additionally, newer companies entering the market may enter with lower IPO rates to help boost their own growth potential and attract more investors.

No matter the case, there are plenty of low cost trades available on the market today. The important question investors should ask is: Which of these low cost trades is worth the time to consider?

The benefit of this type of investment is that it offers little risk for people concerned about losses or mitigating risk. Even if a low cost trade dips below the initial price, its cost in the first place represents a much lower concern. On the other hand, smart investors getting involved with low cost trades could find multiple opportunities with the right strategy. A small investment now with low cost trades could eventually turn into a big return with the right trades.

How low cost trades could work for you

As an investment advisor from SureTrader discussed, lower cost trades are a great way for people who are new to— or apprehensive about— the market to get involved. “Low cost trades mean much smaller risk for investors,” the advisor recently stated. “People who are new to the world of stocks and bonds may not feel comfortable trading large amounts of money until they understand how risk works in the market. By focusing on low cost trades, they can get a sense of how the market operates and work with their financial advisors to develop a long-term plan.”

Many investors who lost money within the last decade may also express hesitation about getting back into the market. As the SureTrader advisor continued, low cost trades can help rebuild confidence and trust with the market and get former participants more enthusiastic about returning to the market.

In the advisor’s words, “We’ve worked with a lot of people who lost money a few years ago and are scared. What we tell them is the same thing that we tell new and veteran clients. The key to finding success through the market is to develop a plan that reflects personal interests and goals. Many clients don’t need major investments to achieve these goals. Instead, they diversify across multiple low cost trades and find significant levels of success.”

Utilizing passive investment opportunities

According to the investment professionals at SureTrader, sometimes programs exist that help make the process of passive, low cost investing considerably easier. According to a Forbes report from contributor Timothy B. Lee, one solid example of this process is with the company Vanguard.

As Lee describes, “Vanguard makes prudent, efficient investing really easy. You can buy into one of Vanguard’s ‘life cycle funds.’ A life cycle fund automatically adjusts your portfolio, gradually shifting into lower-risk assets as you get near your target retirement date. And the fund’s ‘expense ratio’ is under 0.2 percent, a fraction of the 1 to 2 percent fees many other mutual fund companies charge.”

For people more interested in lower risk, lower effort investment opportunities, a company like Vanguard makes sense. It provides an easy way to remain involved in the market with a smaller time investment to manage accounts.

Recognizing the opportunity of low cost trades

Whether you’re a passive investor or an active trader on the market, low cost trades offer multiple advantages in the market today. While the market isn’t nearly as tumultuous and spotty as it was a few years ago, there are always risks associated with investment. Many people take advantage of the market – and make a significant amount of gains over time – by sidestepping these risks with low cost trades.

If you’re interested in the market but unwilling to drop huge amounts into one company, consider diversifying through low cost trades across multiple companies. These types of trades may not make you rich when looked at individually. However, SureTrader advisors note that the right strategy – even with low cost trades – can yield lucrative results when managed properly over time.

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