Accessing the stock market without the need for a broker as a middle man is possible if you know how to invest online. Sadly, many are afraid of getting into online investing because of the possible risks involved while some are not sure of how exactly to set up an online investment account to begin with.
If you fall into either of these categories, do not worry because this article will provide you with the basic information about the level of risk and safety of online investing companies plus the things you need to know when setting up your account for online trading in order to start investing in stocks, mutual funds, bonds and other investment vehicles in the comfort of your own home.
The Online Investing Fundamentals
Both online and offline stock market investing involves the purchasing and selling of bonds, stocks, mutual funds, indexes and other investment assets. Among these, the most commonly traded are stocks as these are public shares of companies.
Next to stocks, the most commonly traded commodities are bonds and indexes. Bonds are the funds that are set up by companies and administrations that are allowed to buy portions of it. Indexes, on the other hand, are purchasable classes of stocks by the stock’s industry.
Is Online Investing Safe?
Online investing involves a lot of sensitive financial data of a wide range of consumers. In addition,
Safety of Online Investing
Since online traders deal with a large amount of money and the financial information of a variety of customers, online trading companies spare no expense when dealing with the safety and security of their customers' personal and transaction information.
Cutting edge encryption and security technology combines to make online investment as safe as possible, and the companies that operate the online investment sites are always on the lookout for ways to make the online trading experience even safer.
Many online trading sites even undergo daily testing to make sure that the site is safe… should a weakness be discovered, they immediately set to work on correcting it.
Setting Up an Online Trading Account
Once you've decided to set up an online trading account so that you can invest over the internet, one of the biggest problems that you might encounter is deciding on which company to choose. Some companies require a minimum initial deposit into a money market account, and others are limited as to the types of trades that they offer.
Take a little while to investigate various options and see whether minimum investments, large per-trade fees, or other factors make them less than ideal for your needs.
After you've decided which company is best for your needs, the setup of your online trading account usually doesn't take much more than the filling out of an online form.
When the account has been set up, you then need to fund your account (most likely from a chequeing account or savings account) before you can begin to trade stocks online. You should also take a little time to explore the options that the company that you chose offers on their website… you may have options for automatic investment, reinvestment of dividends, and even the tracking of stocks or bonds with instructions to buy or sell once the price reaches a certain level.
Take your time in exploring the site and getting used to all of the features and options that are available to you… after all, the more you know about the site then the better you'll be able to make use of it.
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Lower Commissions – Online investing has lower commissions than speaking with a broker. If you invest by speaking with a broker you can expect to pay on between $20 and up to $50 per transaction. Online transactions can be as low as $0 (usually with a minimum balance or minimum paid trades) to about $10 for larger orders. The commission range depends on the broker, number of shares, and type of order.
Faster Trades – Talking to a broker from my experience will get your order in fast but not as fast doing it yourself. Think of it like this. When you are giving your broker an order over the phone what do you think they are doing? That’s right, they are in front of a trade screen (probably a lot like yours) and inputting the order you would have input yourself.
After hours investing – What happens to the broker at the days end? They go home. There may be a night shift buy why risk it. Having online access gives you control to get in and out of positions night and day. So if an event happens you will be able to shift your investments right then. Just be sure the online broker offers after hours investing and don’t just assume it’s there.
Real Time Research – In one place you get access to quotes, news, fundamental and technical analysis, and trading forums. This gives you a great resource to know what is going on in the market and how you can position yourself for better returns and lower risk.
Just Makes Sense
So as you can see, it makes a lot of sense to start investing online. You win as the investor with lower commissions, faster trades, after hour’s investing and real time research. So pull out those web browsers and pick a broker to start investing online today.
Article Source: http://www.articlesbase.com/investing-articles/four-reasons-to-start-investing-online-866118.html
About the AuthorDo you want to start investing online? Then check out my start investing today blog post and see how easy it is. Also if you interested in investing see another article of mine, Start Trading Online.
Investing and investing online in particular may be quite confusing to first time investors. In order to learn how to invest and a good investment strategy, most investment funds and stock investment investors hire professional stock brokers that are educated in stock investments. Personal brokers are able to give professional advice when it comes to deciding on investment funds or mutual funds, and are able to achieve a highly successful investment strategy.
The main job of a stock broker or investment advisor is to act as a middleman between companies and stock investment investors. Also, an investment advisor may help you plan for retirement. First, anyone interested in investing, whether it is investment funds or investing in mutual funds, has to open an account with a brokerage firm. After this first step is out of the way, the investor is taught the basics of how to invest and after that he or she is free to start buying and selling on the stock market.
Good advice for anyone that is just starting to enter the world of mutual funds, stock investment, and investment funds is to practice a little before starting to actually invest their own money. With the current options that investing online brings, investors can now perform dry investments, meaning taking part in simulated stock experiences. Also, keep in mind that most brokerage firms and brokering agents are willing to offer discounts on the fees they charge you.
While some companies have offers that allow their clients to invest in mutual funds through them without opening an account, a brokerage account brings many more benefits than just learning how to invest. Many brokerage firms also provide assistance so that tax problems are avoided and they offer many other special services. For example, many brokerage companies these days offer assistance with retirement planning.
To pull away a little from regular investments and investment funds, here are some of most appealing facts about investing online. First of all, when investing online you pay very low commissions, if any. The commissions for investing online can be anywhere from 1 to 10 dollars, while broker fees range anywhere from 7 to 70 dollars depending on your trade size. In terms of trading speed, investing online is a bit faster, but not by much. Still, usually in stock trading time is of the essence, so every minute counts.
When investing online, you also have the internet at your finger tips, so research is also done in real time. Company information, analyst reports, and everything else that could help you make a good investment is just a few clicks away. In conclusion, anyone new to online investing, and investing in general is strongly advised to do research and learn how to invest before actually investing their own hard earned money. There are many good resources on the internet to help you learn about investing and will help you increase your investment education.
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