Can you Make Money Trading Lithium?

make money trading lithium

Lithium is well known for manufacturing rechargeable batteries and other industrial uses. This is mainly because of its excessive low density preferred by electric cars, Smartphones, digital cameras, and laptop production. For this reason, the valuable metal has steadily become popular in the market. 

As trends and environmental standards embrace energy efficiency, there is a great need for safer and cost-effective products. The mounting demand undeniably instigates the use of lithium products because of their higher voltage capacity, energy density, and reduced self-discharge levels. 

In addition, there is the explosion of lithium stocks that engage organizations involved in the processing and mining of the metal. While most people speculate whether the industry is productive enough, investing in the best lithium ETF is not a bad idea at all. This topic will take you through an imperative process on how you can make a kill with Lithium investing.

How to Invest in Lithium

It is the dream of every investor to make an extra coin out of it. Enthusiastic individuals can consider Exchange Traded Funds (ETF) and lithium stocks. An EFT is a security sold on a stock exchange that monitors commodity, index, and sector. Often, they contain several investments like bonds, stocks, and commodities. If you have to choose between stocks and EFTs, it is worth noting that the former has several concentrated risks.

On the other hand, EFTs offers diversification and broad exposure. Nonetheless, for experienced lithium investors, buying lithium stocks act as a valuable alternative venture. All in all, experts advocate that individuals can get better results if they invest in focused ETFs or trade with startup firms using low-cost lithium. Another ideal option is to invest in reputable lithium manufacturers who run low-cost operations. 

Although ETFs behave similarly with stock investments, they gain their value from concentrating in several related companies. In other words, it translates into investing in numerous slices of Lithium through ETF instead of settling with a particular company with stocks. 

However, ETFs can be more susceptible to market downturns popular with batteries and lithium companies. As a result, they may not offer the broad diversification or cynical properties expected. Here are some of the top best Lithium ETFs you should consider.

The Global X Lithium & Battery Tech ETF

This ETF invests in a variety of organizations making lithium batteries or producing Lithium. In the process, they provide much-needed exposure to battery and lithium markets. Most of them have a market value of approximately 50 dollars per share, with the most investment in Asian companies. At the moment, Albemarle stands out among the fund’s best holdings.

Other prominent brands include Tesla, LG Chem, BYD, Samsung SDI, Ganfeng Lithium, Sumwoda Electronic, etc. This option is suitable for individuals eager to achieve intensive exposure in the lithium world compared to other ETFs.

ETFs Battery Tech and Lithium ACDC

In contrast with the previous option, investment here involves companies creating batteries and the mining firms that manufacture commodities needed for the process. Over 50% of the stock in this range is in Asia, while the rest splits between the US and Europe. 

Some of the best holdings include Tesla, LG Chem, Mineral Resources, BYD, Galaxy Resources, Pilbara Minerals, Renault, and Solar Edge Technologies.

 Top Best Lithium Associated Company

Before investing in Lithium, it is crucial to pinpoint prominent lithium companies. Mainly, this involved brands that mine, produce and refine the commodity.

1. Albemarle Corp

Thanks to the company’s capacity to scale, Albemarle is the most favored lithium partner globally. Situated in Charlotte, North Carolina, the geographical location is perfect for the company’s access to the worldwide lithium market. Also, the company operates on a minimal operating resource which makes it stand out amongst others.

2. Galaxy Resources

The Australian-based company produces Lithium from a hard-rock venture known as Mount Cattlin. Currently, the famous brand has two other upcoming projects in Chile (Sal De Vida Catamarca brine) and Canada (James Bay Hard Rock).

3. Livent Corp

Compared to other lithium companies, Livent is more established and likely to earn you some good money. A 2020 report about a long-term coalition with Tesla prompted a 50% growth by the end of the year. As Livent Corp continues to supply Tesla with higher quantities of Lithium, the future looks promising for interested investors.

4. Lithium Americas

Currently, the Canadian-based firm has two developing lithium projects in the US (Thacker Pass hard-rock) and Argentina (Cauchari-Olaroz brine). The firm is listed in New York and Toronto, with the US project taking pride in its capacity of holding the most considerable quantity of Lithium in America.

5. Pilbara Minerals

The Australian-based company also runs the Pilgangoora project, famous for tantalum and Lithium. The hard-rock project hopes to produce over one million pounds of tantalum and 1.2 million tonnes of spodumene if things go as planned. 

Conclusion

A worthwhile investment should fit in your long-term strategies and should not affect your risk lenience. More participants consider the investment worth a trial with a predictable demand for electric vehicles and other lithium uses. Yet, there is much need for extensive analysis for individuals to understand Lithium’s market value and how to trade wisely.

Stock Trading Is One of the Most Lucrative Forms of Investment

stock trading

Stock trading is one of the most lucrative forms of investment. You make passive income by betting on the performance of a company that you are not involved in daily running. However, before you start investing in stocks and shares, you need to learn the basics of stock trading and how you can make money from this form of investment.

Learn About Stocks and Shares

Take your time to learn about stocks and shares and how the stock market works. For starters, it is better to start with stocks because they are less complicated than shares. Stock is a general term for equities sold at a stock market, while shares refers to owning a piece of a particular company.

There is plenty of free educational resources that you can use to learn about stocks and shares. What’s more, the best brokers offer free education to investors and have knowledgeable and experienced staff who will advise you on the best stocks. You can also practice virtual trading before investing real money into stocks.

Find A Reliable Online Broker

To trade in stocks, you need to open a stock account with an online brokerage firm. Brokerage firms range from small upstarts to established brokers with a large portfolio of investment options.

Take your time to research the best trading platforms in terms of customer experience and commission fees by reading online reviews and consulting experienced investors. Compare the fees charged by different brokers. Check whether they provide investor training, ease of using their website or app, and the investment options they offer.  

Buy Your First Stocks

After finding a suitable brokerage firm, open an account and transfer money from your bank account. Most online brokers have very low minimum deposit requirements, so you can start by investing as little as $200.

Only invest money from your savings because stock trading is a long-term investment that you can’t recoup in a few months. Don’t use funds that are budgeted for near-term expenses such as electricity bills or rent.

It takes time for the funds to transfer and become available for trading. However, some brokers allow you to trade while the transfer is being processed while others require you to wait for a few days. Once the money is available, select the stock or share you want to buy and place an order.

Market and Limit Orders

Typically, the brokerage firms give you several investment options, but there two common types of orders you can use to buy or sell stocks.

Market order: instructs the broker to buy or sell the stock at the best price available on the market.

Limit order: requires the broker to buy or sell stocks at prices better than the specific price you set.

Bundled Stocks

If you are not sure which stocks to buy, you can invest in Exchange Traded Funds (ETFs). ETFs are bundled stocks that allow investors to buy stocks of different companies. The large portfolio protects investors from exposure to wild fluctuations in share prices.

Risk Tolerance

Stock trading comes with risk because you can make or lose money on the stock markets. You need to have some level of risk tolerance because sometimes a stock may plummet to unprecedented levels due to some odd events. If you panic and sell the stock, you might lose money only for the stock to rebound in a few months’ time.

You can start by selecting safe stocks whose prices have been stable for the past five years. Later on, when you start making profits, you can try the riskier stocks, such as promising startups or undervalued stocks.

Learn to Analyze Stocks

If you are to engage in stock trading on the long term, you need to learn more about the dynamics that determine stock prices. Your first stock buys may be informed by advice from your broker, but you should be more proactive about future buys.

Learn about stock valuations by analyzing the performance of different stocks. Use publicly available information such as earnings reports, financial reports, and analysis by reputable financial analysts to gauge the performance of different stocks.

Your broker may chip in with information about the major performance indicators and risk ratings of different companies, so you don’t have to do the calculations. However, you should understand the meanings of different ratios and other metrics used in analyzing stocks. Further, take time to learn the core business of different companies so that you can determine if their model is sustainable.

Tax Implications of Stock Trading

Income from stocks attracts capital gain taxes. Typically, the amount of tax levied reduces if you hold a stock for more than a year. You can also invest some of your salary in stocks as a part of the retirement savings. The benefit of salary-based investments is that they are deducted from income before tax, reducing the tax burden.