More than 70 percent of investors around the globe use the Internet to buy and sell securities
. Online investing can be faster, more convenient, and more affordable than other methods. However, before you decide to manage your own investment portfolio online, there are a few questions you should ask yourself:
- What kind of investor are you? Online investing isn’t for everyone. By going this route, you carry the responsibility for researching all investments and making all of the investment decisions in your online account. If you don’t feel you have the necessary knowledge or time to be that type of investor , you might be more comfortable working with a Financial Advisor. However, if you prefer to direct your own investment portfolio and are confident that you have the requisite investment knowledge, you may want to consider online investing.
- What kind of account do you want to open? There are a number of different online accounts to choose from, including individual or joint accounts, a custodial account for your child, educational IRAs and different types of retirement account. The type of account you choose will depend on the objectives you have for the money you are investing.
- Which companies and types of securities are you interested in? For self-directed investors it pays to do your homework. There is some degree of risk associated with all types of investments, so before buying an individual security, mutual fund or exchange traded fund (ETF) you will want to conduct some research. For an individual stock, among other considerations you will want to study the company’s earnings and growth potential. For an individual bond, you will want to determine the credit worthiness of the bond issuer. Before purchasing a mutual fund you will want to review the manager’s track record, associated fees and expenses. Before purchasing an ETF, you will want to research the sector or the index the ETF tracks. Learning some basic online investing terminology may be helpful.
If online investing suits your needs, this approach may be a way to help grow your portfolio.
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Nielsen Holdings, N.V., “Nielsen Identifies Investment Strategies and Financial Habits of the Global Consumer.” July 11, 2012.
This information is provided for educational and illustrative purposes only.
Wells Fargo Wealth Management provides products and services through Wells Fargo Bank, N.A., and its various affiliates and subsidiaries. Wells Fargo & Company and its affiliates do not provide legal advice. Wells Fargo Advisors and its affiliates do not provide tax or legal advice. Please consult with your tax and legal advisors to determine how this information may impact your own situation.
Exchange Traded Funds are subject to risks similar to those of stocks. Investment returns may fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost.
Investing in mutual funds involves risk. The investment return and principal value of mutual funds will fluctuate, and shares, when sold, may be worth more or less than their original cost.
Investing involves risk, including the possible loss of principal. Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments. An investment in the stock market should be made with an understanding of the risks associated with common stocks, including market fluctuations.
Investing in fixed income securities involves certain risks such as market risk if sold prior to maturity and credit risk especially of investing in high yield bonds, which have lower ratings and are subject to greater volatility. All fixed income investments may be worth less than original costs upon redemption or maturity.
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