The Revolution in Online Trading and Investing
It’s no coincidence that between 2008 and 2010, individual investors pulled more than $400 billion out of full-service brokerage accounts and put that money to work in discount brokerage accounts instead. This new trend toward self-directed, online investing is a very different phenomenon from the day-trading mania of the late 1990s. That was a fad driven by the frenzy for tech stocks, and it ended in disaster. The tech stock speculators of that era still haven’t recovered their money. But the self-directed investors of today are a different story. They’ve made a rational decision to take charge of their own investments instead of paying a small fortune to have someone else do it for them—someone whose financial interests may not be the same as those of their clients.
The trend toward online trading and investing has been helped along, of course, by the availability of things like mobile investment apps and user-friendly stock tracking software. The driving force, however, is not consumers’ love of new technology but rather a desire to take control of their own finances. Indeed, the pull of do-it-yourself, self-directed online trading and investing is so strong that Merrill Lynch, the biggest name in full-service brokerage, recently threw up its hands and opened up a discount operation of its own.
If people are having second thoughts about full-service Wall Street brokerages, they aren’t feeling much better about mutual funds, with the heavy management and marketing fees many of them impose. Mutual fund companies are ingenious when it comes to choosing statistics that show their results in a positive light. What they can’t disguise, however, is the fact that most of them underperform the market as a whole. They don’t perform the same as the overall market; they perform worse, largely because of those onerous fees that most of them charge.
Some people argue for investing in low-fee, passive index mutual funds, which guarantee results that are only slightly worse than the market as a whole. Passive index funds might a better choice than actively managed funds that charge high fees for mediocre performance. Even so, in today’s fast-paced business environment, where companies and even industries can become outdated almost overnight, passive investing is hardly an ideal solution to the needs of ordinary investors.
Are there better solutions at hand? Indeed there are. By investing a little time and effort and harnessing the generous array of tools and data now available to everyone online—at little or no cost—investors can learn to do for themselves what many high-priced stock brokers do not do on the customers’ behalf. They can develop a systematic methodology for identifying the Stock Market‘s myriad opportunities, and they can pursue those opportunities with a disciplined eye toward securing their own financial futures.
Future articles in this series will elaborate upon the ABCs of developing an investment methodology. It is it less difficult than you’ve probably been led to believe, and, besides, most people who take charge of their own investments have fun at it.
About the Author
Check out free, fast and fun stock research and online trading tools at Chaikin Power Tools.
Stock Trading and Investing Ideas for 6/5/07
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Turtle Secrets: How to Trade the Turtle Concepts [VHS] … |
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Michael Covel’s Trend Following Film: Broke $18.97 “Shocking exposé…not a partisan film.” The Huffington Post “Ambitious…in beautiful imagistic fashion.” Big Hollywood Description: Director Michael Covel traveled 75,000 miles over 3 continents to find moneymaking solutions-even when markets are crashing. Face-to-face with Nobel prize winners to pro poker players to great traders, Covel breaks new ground in trend following trading, human psy… |
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Make Money Trading Stocks & Options – Over 24 Hours! $34.95 What is the Ultimate Stock Trading System? Packed into this one DVD, you’ll find over 24 Hours of hands-on videos, showing you the precious system that has made thousands of dollars. Trade with confidence as you discover step by step how to take back control of your financial future. Just look at what’s included: * Introduction to Trading as a Business (3 videos) 4:59:02 |
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FOREX Best Trend-Following Robot trades online, 24 hours a day. Fully Automated Currency Trading System – No programming required – Plug and Trade – Make money from home with No Stress – Version 7, with News Filter, for true Set it and Forget it trading $95.00 There is a lot of money to be made in currency trading. Yet most traders lose money in the Forex market. The reason is simple: human emotions get in the way of their strategies. The mental battle between greed and fear is the killer. “I sold too early” (fear), “the price reversed and turned my profits into losses” (greed), are some of the excuses that traders have for losing their shirt, even thou… |
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