The internet has unleashed an entire commerce universe to complement ordinary investments. This is because the internet is not only a tool but also a resource in and of itself. Online investment connects prospective investors to financial entities through the power of digital marketing.
In the modern era, you don’t need to be a stock markets genius to make moves in this field. There is literally every service imaginable on the internet, and online investments are no exception. Nowadays, you can literally buy or sell stocks from a number of online brokers who offer low-cost trades.
Accordingly, picking the right investment broker is critical in this domain. This is because the internet is representative of the real world. As many as there are genuine and credible investors, there exist fraudulent entities out for the next rip-off. Therefore, it makes sense to go for established and reliable brokers rather than flashy and sketchy ones. As the age-old adage goes, if it is too good to be true, then it probably isn’t.
Nonetheless, online investments are still relatively popular. In the USA alone, 12.29 percent of people between 18-29 and 14.59 percent of people between 30-49 respectively used online investing/stock trading service in 2018. This goes to show that this form of investment is gaining traction worldwide.
Strategy in Investments
Online investment may be more convenient, but that is not to say that it is all smooth sailing. An investor still needs to do their homework before making market moves, just like in direct investments. It goes without saying that online investments are different from online trading. The former requires better analysis and long-term planning.
- Set price limits- A price limit order is essentially an order to buy or sell a security at a specific price. An investor can execute a buy limit order at the limit price or lower. Similarly, you can only execute a sell limit order at the limit price or higher. This safeguards against scenarios where the market price quickly surpasses your limit before your order can be filled. This ensures that an investor neither buys a stock too high nor sells too low.
- Do a back check to ensure orders you place are checked- Placing a purchase order for security twice is not uncommon. In the event you are unsure whether the financial firm you are working with has executed the order, double-check with support.
- Do your homework on the performance of securities-Ultimately; the choice of investment is critical to the success or lack thereof of your securities. Therefore, it makes sense to go for long term reliable securities rather than volatile ones. That said, it does no harm to invest in high potential stocks like tech stocks if they have real promise. This definitely necessitates a level of research and detail in your decisions.
There are a number of options for online investments. They include
- Stocks are obviously the leading candidate because of their prominence, even in traditional investments. Accordingly, you can work with an investment firm to identify stocks in companies you know and make appropriate investments.
- Bonds and bills feature prominently as well. Investing in government bonds can earn you a guaranteed return of up to 10 percent annually. Bonds are more secure than stocks, but in a strongly growing economy, stocks can be more lucrative.
- Unit trusts and pension funds also make the cut. These are sophisticated packages that depend on the online investment firm you work with. They help diversify your portfolio, and the latter can help in growing your retirement and 401K savings.
- Cryptocurrency investments- Bitcoin and other virtual currencies are increasingly credible alternative investments. In bullish markets, Bitcoin can be extremely lucrative. In the few months to end 2017, the price of the coin rose to a remarkable $20,000. Those who had invested early saw a stunning return of more than 1000 percent in some cases. That said, cryptocurrencies are extremely volatile, and one should have extreme caution in that.
Examples of Online Investment Firms
In the competitive field of online investment finance, an investor should go through the profile of these companies carefully. For instance, looking up the history of key figures in the firm can give you an idea of investment patterns. Therefore, to get ahead, it is critical that you do your groundwork and pick the right online investment site before you explore this journey.