In the past, trading and investing were reserved for the wealthy or those who made it their profession. Nowadays, anyone can begin investing with brokerage apps in their pockets and on their computers. It’s never been easier to start your own investment portfolio.
Investing for the masses has never been so popular, partly down to ease and partly due to the rise in interest in investors brought on by the internet. If you’ve become interested in investing online, you may have plenty of questions about how to do it right. If that’s the case, read on for expert tips on how to get into online investing, what to look out for, and what to avoid.
What Can You Trade
Online investing covers several types of investment. There are plenty to choose from, which can lead to confusion on where to start. All of these types of investments can be done through brokerage apps on a smartphone.
- Individual Stocks
Many people are interested in buying individual shares in companies. This can be an interesting way to invest but also risky, as a company’s fortunes can quickly change. This doesn’t mean you shouldn’t invest in individual stocks, but it does require more research and attention.
- ETFs / Funds
Exchange-Traded Funds (ETFs) are a mixture of shares and stocks rolled into one package, often managed by a firm. You’ll pay a small fee for their management of the fund, but this is a great way of diversifying your stock portfolio into a variety of companies.
- Currencies & Cryptocurrencies
Trading currencies is more complex, you trade currency in pairs, effectively selling one for the value of another. This requires plenty of study and market research, as currency prices change rapidly. Cryptocurrencies are now easier than ever to buy, but the market is still young and can be quite volatile.
Look at Brokers’ Fees
One of the things to look for in any of these trading methods is how much it’ll cost you. Ideally, commission-free stock trading is the way to go. This means that when you purchase a stock, your chosen broker doesn’t charge you a commission for doing so. Otherwise, if you are regularly buying and selling, you could end up paying a large amount in fees. With some trades, like currency pairs, it’s very rare to find commission-free trading, so look at which brokers charge the lowest fees.
Low Minimum Deposit
Beginner investors don’t want to invest thousands of dollars, they usually want to test the water and see how they go. As a beginner, then, you want to find a broker with a low or no minimum deposit requirement. This means you can trade with as much or as little as you want and as often as you want, without having to deposit more money than you want to. Again, check for any card or transfer fees, as some brokers charge a percentage on certain cards. This is money you don’t need to spend.
Regulation is Important
Whoever you choose to trade with – and whatever it is you’re trading – make sure your broker is financially regulated in your country. Organizations like the FCA and ASIC make sure that brokers trade legally and look after your money properly. A broker who does not show any form of accreditation or regulation on their site is a risky place to put your money. Make sure they are regulated and that your money is properly protected.
Only Spend What You Can Afford
This is a tip experts share with beginners over and over again. It’s very tempting to think you should throw a huge amount of money in to maximize potential gains, especially after hearing investor’s get-rich stories. But, remember, markets can swing at any time. If you put all of your money into an investment and it dips, you may put yourself in financial trouble. Only invest what you can afford to live without and view it as a long-term investment, not a get-rich-quick scheme.
Education and Tips
Finally, you may want to look for a broker that has educational resources included in their platform. This means how-to guides, investment tips, or educational videos from experienced investors. These things can help you learn the basics, grow your portfolio, and become an experienced investor yourself.
These basics are all you need to know when starting your online investment journey. Take it slow and steady, investing spare cash when you can, and make that money work for you. Before you know it, you’ll be a seasoned pro. Good luck with your investments!