Forex vs Crypto vs Stocks - Which Investment Option is Better for Beginners?

If you’ve just decided that you want to invest some of your money, you’re making a very wise decision. You may be wondering which option would be the best for you, and it can be hard to tell if you have little to no experience with investing.

Some investment options are pushed as best for beginners, but, in reality, the best instrument for you will depend on what type of investor you want to be and how much you’re willing to learn. Let’s look at stocks, crypto, and the forex, and see which one would be the best for someone like you.

The Pros and Cons of the Forex for Beginners

One of the major benefits of the forex for beginners is how easy the principle of currency trading is to grasp. Most people who have had to go to a country with a different currency engaged in forex trading whether they knew it or not, so learning the basics will be much simpler.

Forex trading is also more accessible for most people. You don't need a ton of money to open an account, and the process for opening one is pretty straightforward. Most forex exchanges will only ask for a few pieces of ID and some won't even have a minimum for you to start trading.

With that being said, making lots of money as a beginner on the forex is far from easy. One of the toughest things is tracking market movements and knowing when the best time is to make a move. Not only that, but the profits you make on winning trades will usually be minimal unless you use leverage, and leverage can be a very dangerous tool in the wrong hands. So, forex is not the best tool for everyone, and you’ll need to learn a lot about it before you can make substantial gains.

The Pros and Cons of Cryptocurrencies for Beginners

Cryptocurrencies are not the easiest asset to trade, but they can be very attractive to some beginners. If you’re genuinely passionate about the technology and you believe in it, then we can’t stop you from buying crypto. Cryptocurrencies have the potential to transform the planet’s monetary landscape and having some level of exposure to crypto markets is always a good idea.

Crypto is also a great asset if you actually understand how it works and can tell if a certain coin or token has a real use case. This will allow you to make informed decisions and not rely on some self-proclaimed crypto guru on YouTube.

One thing you have to know, however, is that there are many rules to trading crypto. First, not all exchanges will allow you to trade fiat currency for cryptocurrencies. Tax laws around cryptocurrencies are also very complicated and you will need to hire an accountant if you want to trade crypto seriously and not get into trouble with the HMRC.

If you’re looking for a crypto tax accountant in Cardiff that can help you navigate through cryptocurrency tax regulations UK, we suggest you give Hodge Bakshi Chartered Accountants & Chartered Tax Advisers a look. They've been involved in cryptocurrency since its inception and know more about the subject than almost any accounting firm in the country. They'll be able to tell you what you need to stay compliant, how much you can expect to keep on your gains, and your tax filing requirements as well.

The Pros and Cons of Stocks for Beginners

Stocks can be intimidating for newcomers, but they shouldn't be. If all you want is to make enough money to beat inflation, there are tons of easy hands-off ways that you could invest in the stock market.

You could get a robo-advisor to craft a portfolio especially for you, for instance. They will usually ask that you answer a few questions so they can ascertain your goals and your level of risk tolerance. They will then create a portfolio that will usually be composed of ETFs, or exchange-traded funds.

ETFs are baskets of funds that are traded over the open market. An ETF could allow you to bet on a certain sector or shadow entire indices. They're easily the safest and most beginner-friendly way to invest in stocks since they don't need you to perform full technical analysis on every stock.

If you want to make a lot of money and trade individual stocks, however, it will take a lot of experience for you to be consistent. The vast majority of people who trade individual stocks end up losing money, and from those who don’t, a large percentage are barely breaking even. So, be prepared to learn how to read charts, balance sheets, and how to use different indicators before you even start trading stocks.

Now that you know a bit more about different investment options, you’ll be able to tell which one you should start with. Remember that the best way to invest is to diversify your assets, however, so learn as much as you can about all these instruments even if you don't have the intention to invest in them right now.