How to Use the Internet to Invest Your Money

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Online investors have been in the news frequently in the past few years as new ways of trading have become more popular. Individual investors have found ways to grow their wealth that make it all seem like magic. Different platforms and more accessibility to currencies has made it easier for everyday people to invest.

So how can you invest on the internet? And what can you trade online? You can do a lot online with just a little money if you research carefully before investing. The Internet has opened the market so that one doesn’t have to be a Wall Street tycoon to become a trader.

What Online Markets Are Available?

There are different types of investments that people can make to grow their wealth both short-term and long-term. 

  • The stock market is the most famous place to trade and has traditionally been traded in places like Wall Street, London, and Tokyo. The Internet has opened the stock market up to people from all over, who can buy and sell stock options that give them a fractional share of a company’s profits and value. There are many different ways to trade stocks, both on your own or in a mutual fund with other investors. 
  • FOREX is the nickname for the foreign exchange, a form of options trading that relies on the relative value of the foreign currency. The most common trades use United States dollars to buy currencies such as the Euro, the British Pound, or the Japanese Yen while their value relative to the dollar is low. When the foreign currencies rise in value, they are worth more in dollars, creating profit.
  • Cryptocurrency refers to “Internet coins” or digital currency, a digital asset that acts as storage for wealth. Cryptocurrency also goes up and down in value as each transaction is recorded in an encrypted digital ledger. There are several different currencies that can be exchanged, bought, or sold. The encryption ensures that only authorized users can access crypto accounts.
  • Commodities like gold and silver can be traded in many of the same places as other options like stocks and FOREX. In fact, commodities can be traded for the fluctuation in their value, or bet on as futures, which is speculation that when a product is delivered it will make a profit.
  • Banking products are intended to grow your wealth short and long term. Certificates of Deposit (CDs) and money market accounts are like savings accounts with higher rates, and banking websites usually offer investment products and services online.
  • Buying web addresses is a way to invest online in a digital product that you can sell to anyone in the world. Web addresses for businesses and causes are commodities that can sometimes have a high value, especially if they are tied somehow to a  major brand. Web addresses are registered through an organization called ICANN (Internet Corporation for Assigned Names and Numbers), which lists the owner of the website and their contact information. Buying domains that are in demand can be like flipping digital real estate.

Your Broker is Online 

Gone are the days where investors needed a stockbroker in Manhattan to be able to participate in the market. Online trading platforms have put investment directly in the hands of the investor. There are platforms that handle every type of trade and offer a variety of services and benefits.

Trading platforms act as online brokers, as well as advisors and educational resources. Using an online broker, you can buy stocks and other commodities in nearly real-time, from anywhere, no matter what time of day. Mobile apps allow you to follow your investments up to the minute and have trading tools that allow you to buy or sell on the spot. 

Are Online Brokers Safe?

As with any online commerce, it is important to ensure you are doing business with a reputable broker. You don’t want to give your hard-earned investing money to thieves and scammers. There are a few ways to tell if your broker is legitimate. 

  • You can easily identify a formal company name and registration behind the broker. 
  • The broker has been in business long enough to build a reputation.
  • You can find and verify the physical address, owner, and officers of the company backing the broker.
  • There is the contact information for customer service, and that customer service responds quickly and efficiently.
  • How much access do you have toward the money you deposit with the broker.
  • A reputable company will be licensed by regulatory agencies such as the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). The United States has some of the strictest investing regulations in the world, so a broker that is licensed by one of these agencies is agreeing to abide by them. Not all unlicensed brokers are disreputable, but there are a lot of countries with lax financial laws and scammers are more likely to establish themselves in these countries.

How do I Invest Money on the Internet?

Once you’ve chosen your broker, you may be tempted to deposit money and get on with your investing. Before you risk losing real money, it’s a good idea to practice and educate yourself on both your chosen market and your chosen trading platform.

Demo Accounts

A lot of trading platforms are complex enough to need a tutorial to learn how they work, so the brokers offer users a demo account to practice using the platform before depositing with them. Demo accounts feature real-time trade figures, but the money you invest is imaginary, like video game currency. Using a demo account can give you a realistic feel for what to expect when you deposit real money with a broker. It’s a good idea to try demo accounts for different platforms before settling on one.

Take a Class

What are stop limits and sell stops? What’s your margin? You may not have to be an expert in investing but you should at least know the basics. Many brokers have free online courses for investors to learn trading strategies, how to read technical analysis, and how to mitigate or avoid heavy losses.

Have a Robo-Advisor Manage Your Investing

For some people, learning about the market is daunting or too time-consuming. Robo-advisors are automated trading platforms that study algorithms and trends to optimize your portfolio. They do all the investing for you based on what’s happening in the market. These platforms do have humans that can help if you have questions, but your portfolio management is handled for you by an automated system.

The Best Investment You Can Make

Before you can trade online, you need to get online. Having fast, reliable Internet is important for investing and trading online, because the market moves, and investors need to be able to follow. You can check out what Internet plans are available in your area by going to Compare Internet or calling 1-833-933-2468. Your Internet connection is an important investment in your home, so wouldn’t you like to know if you’re getting the best plan for your portfolio?