How to Monetize Market Fluctuations

It is like a market to fluctuate, driving prices up and down. However, for inexperienced investors and aspiring profit-makers in the household, fluctuations can become a source of fear and stress.

Many think of the market as a living entity, which is impossible to control. In truth, the market is a combination of the collective values of individual businesses. As such, you can rely on fundamental indicators and principles to predict the ups and downs of the market and repurpose these for profits.

The essential principle of a market is its reliance on supply and demand. In an ideal world, markets seek equilibrium where demand equals supply. In this instance, prices remain unchanged. However, as there are disparities between what consumers demand and what providers can bring to the market, the price movement adjusts to meet a new equilibrium position.

Additionally, another factor of fluctuation has to do with changes in the numbers of buyers and sellers. For example, conflicts and natural disasters affect the stability of future investments. The market lost value after the September 11 attacks in the US due to fear and uncertainty about the situation. Buyers were reluctant to engage in transactions, creating a dramatic drop in price value as supply exceeded demand.

Other harmful factors that influence whether sellers or buyers join the market refer to concerns about the economic situation, fiscal policies, corporate performance, and technological evolution. With these facts in mind, you are in a better position to predict market fluctuations and prepare to monetize price changes. Keeping informed about national and global events, as well as industry-specific elements, is a priority. But it can pay off significantly.

How to use market fluctuations to earn money

As prices change, you can track price up movements to make money. As mentioned above, this requires a constant flow of information and the ability to jump into action at the right time. Yet, amateur and enthusiastic investors can find profitable opportunities.

Follow trends in the market.

Admittedly, it takes a lot of knowledge and time to keep track of all minor and significant trends on the market. More importantly, taking positions on your predictions can be time-demanding with individual betting plans. You need to own the asset to sell it at the right time, which implies that you should also have bought the asset preliminary at a good time.

Instead, it would help if you had a tool that allows you to speculate on price movements quickly without needing to buy or sell assets. CFD trading can let you do just that. However, there’s a tax-efficient alternative, spread betting with Pepperstone, which allows you to earn money without paying tax on capital gains. The Pepperstone tool is suitable for individuals with all trading levels.

Sell rare and popular items online.

How much money can you make selling items on eBay? The answer depends on what you sell and when you sell it. Some goods are likely to drive prices up due to their nature, such as the insurance broker who sold an entire ghost town in Texas for $2.5 million in 2007.

Rare items are also likely to attract big buyers. In 2006, the owner of a unique Martian meteorite piece managed to sell the rock on eBay for almost half a million, proof that you can sell nearly anything for the right price. Similarly, the seller who owned a bottle of ale brewed for the 1852 Arctic Expedition made a similar profit. Rare items can make you rich.

Don’t own anything that special? You can still try your hands by keeping track of popular products on online selling platforms. You may not make millions, but you can make some handy cash with the right timing.

Buy and sell homes at the right time.

Property investors embrace real estate market fluctuations to ensure they can always sell for a profit. For instance, the COVID pandemic affects the housing market dramatically, creating a situation in which buyers are not willing to commit to large purchases.

As such, house prices are going down because the supply exceeds demand. For prospective buyers, it’s an ideal scenario. For sellers, the best solution for profit is to wait until the pandemic crisis has been fully managed. House flippers, however, are an exception, as smart investors can expect to make a profit even if they sell at a low price.

How to use market fluctuations to save money

Following the example of the housing market, the other approach to embracing price fluctuations is knowing when is the right time to buy at the best price. In other words, targeting bargains is inherent to a good understanding of market fluctuations.

Save on your travel plans.

Another positive impact of the pandemic is the cost of travel. The travel industry has been suffering through an unprecedented situation that has seen many cancelations and much travel anxiety.

Therefore, great deals are becoming easier to find as travel agencies and airline companies compete to attract buyers. If you are comfortable with safety measures while traveling, you can discover valuable deals online.

Save on your energy & broadband bills.

Most households need to brace themselves for an increase in energy and broadband bills. As we’ve been stuck at home for months, we’ve been consuming more energy – and data for those who don’t have an unlimited data deal – as part of our day-to-day life. Comparing prices with other providers is a no-brainer to get the best deal.

However, you can also find out more about the COVID-specific deals for low-income households. Indeed, the traditional market fluctuation rule doesn’t apply here. Increased demand should drive higher prices to meet the limited supply. However, companies need economic recovery at a national level, therefore supporting future buyers with lower prices whenever possible.

That’s why price fluctuations depend on the equilibrium and concerns about the economic situation – whether present or future.

The Bottom Line

In conclusion, the market may appear to be a continually changing and evolving entity. Still, investors and buyers can learn to predict significant drop and increase motions with the right knowledge and data.

A seasoned investor will be equipped with the tools and analytical know-how to make large-scale decisions for profit or enhanced savings. However, individuals can also learn to read through the lines to monetize market fluctuations for their benefit.

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Michael launched Wealth of Geeks to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.