The millennial generation, affectionately known as the ‘Net Generation’, has grown up in a world where information is practically ubiquitous. Not only has the Internet allowed the rapid spread of information, it has also made daily tasks like banking a lot easier. A recent BMO InvestorLine study reveals that the trend towards doing everything online looks to continue its rapid growth – 81 per cent of those ages 18 to 34 are likely to be investing online in the next five years. With only two in 10 (20 per cent) of Canadians invest online today, what’s driving this sudden change?
The Benefits of Online Investing
Let’s face it; the days of calling your stock broker to make trades on your behalf are long gone. Today, a lot of investors take the DIY approach and want more control over their portfolio. Our lives are hectic enough as it is – it’s tough to find time to set up an appointment with a financial advisor and review your investing strategy. If you feel confident managing your own investments, online brokerages offer a great way to purchase, sell, and keep a close eye on your investments on your own time.
“Canadians clearly are comfortable and have a passion for being online, and the Internet is a growing part of their daily lives,” said Viki Lazaris, President and CEO of BMO InvestorLine. “Online investing is a natural extension of that, offering investors more control over their portfolios, the ability to monitor their investments 24/7 and access to extensive research and tools.”
Tips for Investing Online
It’s important to learn the ropes of online investing – the last thing you want to do is lose your shirt over a few bad trades. Here are some tips:
Choose Wisely: Do you know which online brokerage you’re going to go with? There are many to choose from – BMO InvestorLine, RBC Direct Investing, Scotia iTrade, Questrade, and the list goes on. While it’s easiest to open an account with your local branch, convenience doesn’t always mean the best detail – some lenders charge sky high commissions and fees per trade.
It’s also a good idea to review the services offered to investors, including resources, tools, the user interface and stock screener. These can be crucial to help you make the right decisions.
Lending a Helping Hand: For new investors support can be crucial – even for those taking the DIY approach. If you’ve never managed your own portfolio there can be a steep learning curve. You’ll want to find an online brokerage that offers plenty of assistance. Demonstrations, seminars, webcasts, tutorials, analyst reports and newsletters are just some of the tools at the disposal of investors today. Although it’s great to be able to trade 24/7, sometimes it’s nice to be able to pick up the phone and get a human on the other line. Make sure to ask plenty of questions beforehand to make sure you’re not in over your head.
Investing Tools: You can’t possibly make the right financial decisions without the right tools. It’s wise to ask about the tools and resources offered by online brokerages to find out if they’ll meet your needs. While basic financial information will probably do for the average investor, if you’re a serious trader you’ll want access to latest up to the minute trading news and information. Access to information on highly respected websites like Morningstar can help turn your investing dream into a reality.
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