Online investment has experienced a phenomenal growth in the recent years owing to immense development of information technology in assisting investment related functions for the investment firms and brokerages to analyze the capital market effectively.
Online investment usually refers to trading in stocks, bonds, company shares and equities over the Internet.
Online investments in shares and mutual funds are the most popular currently. Online investment opportunities can lead you to instant investment research options and price quotes of all stocks listed on the stock exchange. More importantly, it gives you the chance to schedule investments on a weekly or monthly basis and invest as much amount you want.
The two factors contributing to growth of
online investments recently has been the ready access to raw data and the fact that investment houses can offer transactions at lower prices obviating the need for brokers and financial advisors.
E-brokerage houses have emerged which allow investors to buy and sell stocks and obtain investment information from its website. Few traditional investment houses offer e-brokerage services while many established online investment houses have also emerged. But online investment firms are yet to attract the majority of mainstream investors, who represent 85% of the retail investment category.
Majority of investors prefer a combination of online investment opportunities coupled with financial advice and guidance. The survival of brokerage firms will depend on how quickly they can identify potential customers.
But all is not so bright when investing online as the Federal Trade Commission (FTC) under the Federal Government of the USA has sounded a word of caution for consumers to be aware of fraudulent investment promoters. They usually resort to attractive terms such as “big profits guaranteed within a short period of time” or that the “element of risk is minimum” and force you to invest because it is the opportune time as the “market is moving.”
Various other terms such as “offshore investments are tax-free and confidential” are also used to lure the potential and gullible investors. Lastly, potential investors can although use the services of various online investing companies to get stock quotes and attractive investment opportunities should be careful never to submit their financial information online. In a way, you can get all the capital market and stock market commentary at the “click” of a mouse but should never fall in the wrong trap.