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Some investors shun conventional approaches and constantly seek out different, off-the-beaten-path methods for investing in the stock market. Fortunately for them, the markets are a diverse bag of opportunity that allow for dozens of kinds of participation. If you are one of the millions of people who want to try out a less common way of entering the stock market, here are a few that have been around a while and have more than a few adherents:
Buy Precious Metal Stocks
Investors who are averse to the stock market in general often choose non-traditional shares. One way to do that is to purchase shares in stocks that represent ownership of gold, silver and other precious metals. Many investors who use this approach also own physical bullion but take part in the stock exchanges as a way to diversify their metal holdings.
Try After Hours Trading
After hours trading can be risky for investors but also offers unique opportunities. This four-hour window from 4 p.m. to 8 p.m. EDT is an excellent way to trade after important news has been announced. It’s also an ideal way for technical traders to do their calculations after market close and then enter orders when all the dust has settled.
Trade Penny Stocks
Millions of people trade stocks that list for less than $5 per share. These low-priced issues allow investors to purchase large blocks of shares for reasonable amounts of money. Some micro-caps, as penny stocks are sometimes called, experience volatile price changes that can mean huge profits, or huge losses.
Buy Stock in Companies Whose Products You Use
There are investors who prefer to avoid all the technical and statistical analysis and simply purchase what they know. A common way to do this is to only purchase shares of a company that makes a product you use. What kind of car do you drive? What major food brands take up space in your cupboards and refrigerator? What are the corporate names on the clothes your wear? Answer those questions and you’ll automatically know which stocks to buy.
Invest in Companies That Match Your Values
Often known as “faith-based” or “values” investing, this technique is for the true believers who want to support companies that endorse their values. For example, Second Amendment enthusiasts might only purchase shares in companies that make guns, or environmental activists would invest in firms that produce solar energy products.
Look for Stocks That Cross Above 200-Day Averages
So-called “technical traders” often use a single indicator to figure out what stocks to buy. A common way to use this technique is to only buy a stock after it crosses above its 200-day moving average. In theory, the 200-day chart line is a reliable indicator of price support and future growth.
No matter how you invest in the stock market, be sure to do enough research before putting your money on the line. It’s also a good idea to paper trade for a few weeks just to get the hang of all the exchange rules and market idiosyncrasies that sometimes stump new investors.