The year 2020 has been a rough one so far. With only a few months left on the calendar, we don’t really expect it to get any better either. Aside from the whole pandemic thing that’s going on, another area of life that has been massively affected is the economy. We’ve seen the stock markets open and close with such massive drops that many are wondering whether you can even make money from the stock market in 2020? As it turns out, you can, and here’s how!
The Beginning of the End?
The real timing of the market crash of 2020 is hard to pinpoint, but most analysts are tracing it back to early March when DOW closed with a 7.79% drop in a single day. That’s 1920s levels of Black Friday misery. Two things happened.
First, we saw numerous authority figures in the stock market trading starting to ring the bell of doom, claiming that it’s the beginning of the end. More importantly, we’ve seen an influx of newbie speculators who heard stories of cheap airline stocks and other awesome spoils that were left for the taking amidst the ongoing crisis. While the few lucky ones managed to pick the right stocks, most people bought the dip and ended up losing money. So much so that many started wondering whether you can actually make money in this climate?
Business as Usual
As it turns out, you most definitely can, but you shouldn’t surrender yourself to cheap speculation. Here’s a little secret – the ways to make money on the stock market haven’t changed one bit since the last year, or the year before. All the usual rules apply, now more than ever.
The sooner you ditch the idea that you can get rich overnight, following some kind of twisted ‘Wolf of Wall Street’ fantasy, the better. Trading stocks is all about following a strategy and planning long term. If you look at most previous stock market crashes, the market has always recovered. People who kept investing in safe stocks are the people who didn’t feel any of these crashes. On the other hand, those who panic sold their entire portfolio got left holding the bag.
Understanding the Basics
If you’re serious about making money from stocks, you should spend the time to figure out the basics of trading. We’re not talking about the flashy stuff you see in various ‘crash courses that will make you rich’. We’re talking about the basics of technical analysis and more. Learn how the market works so that you can quickly disperse any misconceptions about how all of this works. The sooner you’re able to focus on what matters, the better.
Gaining knowledge is easy these days. Everything is just a few clicks away. You’ve got entire communities such as the Investors Underground, that offer a wealth of knowledge with a complete dvd course and chatroom included. Communities like this one can absolutely fast track your progress and help you get slightly ahead of the curve.
That being said, you can always take the old school route and start reading the classics. Like we’ve said, stock trading hasn’t really changed much.
The Buy Low – Sell High Fallacy
When the 2020 mayhem first began, initial projections were grim, to say the least. Many saw the appearance of crazy candles as a perfect opportunity to buy low and sell high or to catch the dip. Trying to time such short-term positions in an incredibly volatile market has very little to do with skill. At that point, you’re gambling, and honestly, it might be safer just to put everything on black and roll the dice.
The Golden 10%
Instead of trying to beat the market, you should look to get a 10% annual return on your investment. Setting up a portfolio that allows you to do this is far more doable than the high risk, high reward trades that many are dreaming of. With a 10% annual return, you’re looking at a solid investment for the future. Add to that a steady addition of new stocks to your portfolio, and you might even retire early.
The Glamour is Gone
Actually, it was never there to begin with. Stock trading is all about playing the long game and setting yourself up for success 20-30 years from now. The quick and risky stuff can yield a good payday from time to time, but that’s mostly a matter of chance.
Can you afford to put your savings at risk with such trades in the middle of a pandemic? The answer is most likely a solid NO for most people. Play smart and win big.