In this post, we are going to discuss the benefits of online investing. Of course, all investing involves risk and you should be willing to do some research before committing money to anything. However, this is the year 2020 and there has been no better time in history than to find ways to make your money work for you than now.
So, before we consider the benefits of online investing, let’s give a brief definition and description of what it is. We are talking about the ability to buy and sell commodities (stocks, bonds, options, etc.) online from the comfort of your home with the purpose of growing the money you already pose. Online trading usually requires that you open some type of online account with a financial institution with hopes of making investments. You may or may not use a broker of some type but in most cases, you are in control of your money and how it is invested. The key to earning and profits usually comes down to your knowledge and decisions. So, let’s discuss the benefits of this type of investing…
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1. Inexpensive: No middleman means lower fees
With many online trading platforms, there are little to no broker fees. Even if you use a traditional broker, they may encourage you to trade online to or reduce costs that are usually charged with traditional trading. Even if you invest in large trades, you can usually negotiate broker’s fees. Furthermore, online trading platforms allow you to bypass the need to speak with a broker.
2. Convenience: very little time commitment
You need an open trading account with internet access. Most online trading platforms are built around the ideal of simple and seamless which results in a very small-time commitment. Besides, you are not investing money so you can take on another job instead you want your money working for you. Many trading platforms have made the trading process so seamless that most things you need to do as an investor can be done on a smartphone.
3. The economy is growing and so should your portfolio
The current economy is expanding so there are many great online investments that you should take advantage of to increase your bottom line.
4. You have more control and flexibility of your portfolio
You are complete control which means you can trade anytime and anywhere. You don’t have this type of flexibility with traditional investing and trading. With online trading, you are not at the mercy of a broker’s time. Instead, you can make transactions on your time and in short notice.
5. You can limit errors that are often associated with traditional trading.
Miscommunication is normal in traditional trading because often what the investor wants and what the broker thinks the investor wants are two different things. This is eliminated with online trading.
6. You can monitor your money in real time
You can watch your investments anytime on almost all online trading platforms. You are usually given access to real time data, analysis, and charts to help you make decisions based on what is important to you. Many online trading platforms offer advice from expert brokers to assist you in times that may be unsure of what is happening with your investment.
7. You can stay ahead of inflation
The average annual inflation rate is 2.9% and yet the annual rate of return on stocks is around 10%, which means if you should employ of buying into the market and holding, your money can grow faster than inflation.
8. It is easier than ever.
It is easy to buy and sell into almost any market for almost any amount. You can purchase investments in minutes and with little to no commission fees. Online tools and platforms exist for almost anyone’s portfolio. Many of these online platforms are free of many traditional hassles you may find with traditional investing. Most online trading platforms don’t require any special knowledge or skill to effectively use them.
9. Avoid other people’s biases
Brokers are notorious for giving advice that benefits the broker in the form of commissions. You can avoid this dilemma altogether. You can review all your own options and make decisions that are in your best interest without being pressured to make a decision that serves the interest of some else. You can limit or even eliminate outside interference. As you trade online and become more experienced, you will understand the markets and be able to use your knowledge and experience to your advantage.
10. It is safer than ever.
Many online and legal safeguards have been put in place to ensure that you can protect your investment. Many online trading platforms have an interest in your money being successful, so scams are not tolerated. Online trading is one of the most secured ways to trade commodities and invest money.
As you can see, the advantages of online investing and trading have never been more numerous. However, as I stated in the beginning of this post, there are risks involved. You could make a poor decision on an investment based on a lack of knowledge or experience with the market. Investing errors and missteps can be avoided with proper training and education so before investing real money make sure you acquire the necessary knowledge to make the right decisions.
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