Making a lot of money in the stock market can be done quickly with a couple of high risk investments. But not every investor feels secure investing like that. Luckily, there is not just one way to invest in the stock market. Here is how to make a lot of money in the stock market with a low risk investment.
Making money from dividends.
The more money you have, the less of a risk you will have to take to make a good amount of money. Some investors have so much money they can just get rich simply from their dividends. Even if the dividend is as small as just one or two percent, a lot of money can still be made. Especially if the investor has chosen a secure stock that does not have a lot of risk. While the stock might not rocket upwards overnight, it could be making a steady climb. The more money that is put in the larger the return from the dividends will be. The dividend does not come from your initial investment but what the current worth of the stock is. So if it has increased in value so will your dividend. And if the investor has millions of dollars investing in the stock, they can stand to make a livable income just from their dividends. By choosing a stock with a decent dividend and potential growth, the investor can stand to make a hefty return.
Using stock options to lower the risk.
When many people think of stock options, they think of high risk. If they are buying and selling these for a profit, that might be the case. But if they are applying the stock options to the current shares they own, it can lower the risk. Think of stock options as insurance for a stock. If a stock plummets and you own puts, you can sell your shares back at the strike price that you have purchased. This takes a lot of the risk out of investing. While it will take some of your profits, it can give you the peace of mind that you need. They can also help if you want to buy a stock but do not know what it is going to do. If calls have been purchased, you can buy a stock at a certain strike price even if it rises to an incredible amount. This will make it where you do not have to put very much money on the line to secure an investment. Stock options can be less risky, depending on what you are planning on doing with the options.
The amount of money you are using.
For most low risk investments in the stock market, you must have a great deal of money to see a large return. This is because even a small move, with a large investment, can be a great return. While 10% on a hundred dollars is not much, 10% on a million is. You will not have to pick a penny stock and hope that it takes off to make an incredible amount of money. Just spend a little time researching the stock market to see what would be a safe investment, and put a large amount of money with it. But be aware there are no sure things in the stock market, so make sure the money you are investing will not effect bills or other payments that you must make.