Online investing

Online investments have grown in popularity in recent years among novice and experienced stock traders alike. With an online account, investors purchase and sell stocks themselves for a nominal fee, usually under $10, depending on the amount of shares they trade or purchase. Many times, the online trading companies will also have incentives for new customers such as no commission fees on the first hundred shares investors buy or trade.

Benefits of online investing
There are a number of benefits to online stock trading, including:

>No commissions. Perhaps one of the main reasons online stock trading is so popular is because investors don't have to pay hefty commission fees to brokers that take away from their net return. Small fees are usually attached to online trading, generally about $7-10 per trade, so it's important to make sure the trade is actually worth it. Many online trading companies also allow for negotiation of these fees, particularly for investors who trade in large volumes.

• No outside influences. Often a broker will disagree with your decision to trade or not to trade and as a result, won't do it. While some people may find this helpful, others prefer to be in complete control. In addition, some brokers won't buy and sell certain stocks, such as penny stocks. Trading stocks online allows investors to buy and trade according to what they think is right.


• Speed. Time is one of the deciding factors in the amount of money you will make or lose when trading stocks. When going through a broker, you first have to call him or her and tell him to buy or sell the stock. He then tells you the price and gets a verbal agreement from you to go ahead. Once he has that agreement, he must then call the trader. It can be a time-intensive process. Online, however, you simply click the mouse a few times and you're done.
  
  • Technology. Trading online has such benefits as real-time stock prices and charts, so the information is always current and updated.

Choosing an online investment platform

• First, select a company. Scottrade, eTrade, and Fidelity are just a few of many. When choosing an online company, consider trading fees and customer service, for example. One important thing to keep in mind is that online brokers don't offer research or information about which stocks to buy or sell, so it's vital that the company has real-time stock prices and updates. Without them, you could lose more money than a typical broker would charge in commission.


• Fill out the application. This includes basic information and stock history/financial information. Some companies will also require you to send in a hard copy.


• Pay the joining fees. Some, but not all, companies require joining fees to set up an online account. However, you will also want to shop around and consider any discounts being offered. Many times, companies will have incentives for new customers such as no commission fees on the first hundred shares you buy or trade or no joining fees.


• Deposit money in your account. Once you have completed the online application and gotten any necessary approval, you can deposit money into your account. This can be done via credit or debit card, but some companies will require a cash deposit into a bank account.

The above are a few tips you need to know if you are going to be investing online.

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