It wasn’t too long ago that if you wanted to place a trade in the stock market, you had to make a call to your brokerage firm’s representative to do so. And, depending on the security, there were different and potentially high fees involved. With the advent of online trading, trading can be faster, but there are still fees involved.
What Should You Find Out?
If you’re thinking about adding this type of trading to your repertoire of investments, here are five rules of thumb:
- Contact your financial advisor. Getting help from a professional can alleviate some of your initial questions about online trading.
- Get educated about the different markets (national and international).
- Find out about the fees involved with online trading. For reference, you can check out the eToro minimum deposit fee and see what they charge to start trading.
- Find out which securities you’ll want and do your research on them.
- Last but not least, research the best online brokerage for you.
Trading in General
There are four critical aspects to think about before trading, whether it’s online or through a broker:
- Do you know what you’re doing?
- Have you studied the market yourself?
- Are you just jumping in because everyone is?
- Are you financially able to trade?
Again, talking with a financial advisor can help. Trading isn’t just about buying or selling. Your advisor will be able to talk you through some of your questions and concerns.
Before Getting Started
Now that you’ve spoken with a professional before trading ask yourself if you’re dipping into money that you know you’ll need to use soon. Are you dipping into your emergency fund to buy? Are you financially stable before you get into the market?
The truth is, there’s an order of things when it comes to money, and you’re the only one who knows that for you. Maybe education or paying off your student loans comes first. It doesn’t mean you can’t save at the same time, or trade, but are you in-line with your financial goals?
Before you begin trading, you need to study. The cheapest thing you can do to become a smart investor is to explore what you want to do. If you find that this is something you do want to do, then research the companies you want to do it through. Perhaps this means a traditional firm, or maybe it’s an online broker. At any rate, those answers lay only within you.
The World Right Now
If you’re living in the world right now, you know that the markers have taken a bit of plunge. Because of recent health concerns regarding the COVID-19 virus, unexpected changes have come to the world’s economy, whether you live in a superpower country or a developing nation.
What You Keep Hearing
Here are some of the statements you’re likely hearing:
- “This is a great time to buy!”
- “This is going to kill our economy.”
- “The market is never going to be the same.”
- “We may be entering some dark times.”
Regardless of what you hear, what’s most important is to stay calm and manage your finances as you see fit for you.
Remember this: This may be a great time to buy for some, but not for others. Talk to your financial advisor about it. Talking about money with an advisor you trust clears your head and helps you make sense of certain aspects of the market. Fees, no fees, online or in person, these decisions will come after taking the time to study and figure out what’s right for you.