Investing is an interesting topic because there are so many ways to go about it. One of the most common ways to invest for the long run is to look for solid stocks that are known for producing great dividends. While these stocks are great for dividends, they aren't always the best for fast paced growth. As an investment professional, I'm often asked what investors should do to realize higher yields once they start earning dividends. The reality is that there are several ways to reinvest dividends in an attempt to maximize profits. Today, we'll talk about some of the most common.
Reinvesting Dividends Into High Momentum Stocks
High momentum stocks are stocks that are known to move quickly, generating large yields, or large losses over a relatively small period of time. While this process is risky, it's important to remember that the more risk involved in investments, the higher the profit potential. Most high momentum stocks are penny stocks that haven't proven much. However, when a stock worth only $0.10 climbs by $0.03 in a single day, the profits on the growth are incredible! The best way to go about this is to look into low cost stocks that are likely to release some kind of report in the near future. This may be an earnings report, results from a pharmaceutical study, progress on a product and more. Before the report is released, buy shares. After the release of the report, you can expect to see great movement in the stock.
Reinvest Dividends Into Binary Options
Retail binary options are a relatively new investment vehicle. In fact, they didn't even become available until 2008. While this is a new investment vehicle it has become incredibly popular very fast. That's because while trading binary options comes with risk, it is also very profitable. When trading binary options, traders don't purchase shares in stock, commodities, or any other asset for that matter. Instead, they simply make predictions with regard to what direction the value of an asset is likely to move. If their predictions are correct, they stand to gain around 80% profits or more. Adversely, when predictions are incorrect, they could lose their initial investment.
Reinvest Dividends Into The Forex Market
The Forex market is also known as the currency market. This is where investors buy and sell currency in an attempt to gain a profit. Forex trading has become incredibly popular over the years because of the high amounts of opportunities that we see in the market on any given day. After all, the most in demand asset in the world is currency. Because of the high demand for the asset, currencies are heavily traded, leading to high fluctuations in values. Essentially, currency traders make money in two ways. When they believe that the value of a currency is going to go up, they purchase long positions in the currency to ride the trends up to profits. Adversely, when they believe that the value of the currency is likely to fall, they purchase short positions in an attempt to take advantage of the downward movement.
Final Thoughts
Reinvesting dividends back into slow growth dividend stocks can be fruitful, but it won't necessarily produce the massive gains that investors are generally looking for from the market. As a result, using the dividends to take advantage of high risk, high reward investment vehicles is a great way to realize massive growth. There are several ways to do just that. All it takes is a creative mind and a willingness to go after larger gains!
