A growing number of so-called financial “gurus” have touted the benefits associated with online investing. Some promise millions overnight if their methods are followed while others claim that this hobby can produce a sustainable source of income within a short period of time. Is there any validity to such statements or are these nothing more than shrewd sales tactics? Let us take a quick and entirely objective look at what you stand to gain as well as some common errors that may serve to hamper your efforts.
A Look at the Basics
The main theory behind online investing (and the primary way in which it differs from traditional forms) is that you no longer need to work with a middleman. In other words, the majority of commissions and fees have been dramatically reduced. This leads to higher profit margins and hopefully, an additional income stream. Much like in the real world, there are several asset classes to choose from including:
- Contracts for difference (CFDs)
- Forex pairs
- Exchange-traded funds (ETFs)
- Bonds and treasuries
These and other categories can be accessed via an online trading platform and executions will be made within a real-time scenario. Thus, you need to stay on top of the latest movements in order to make the right decisions and the appropriate times.
The Rise of Mobile Investing
Another benefit associated with online investing is that there are now countless financially oriented mobile applications to choose from. These provide all of the same utilities to be found on a standard web page and naturally, you can access your account while away from home. These are also excellent ways to keep abreast of any late-breaking fiscal news; offering you the ability to make snap decisions within seconds as long as a strong wireless connection is available.
Mistakes to avoid Along the Way
Still, the notion of becoming a millionaire overnight is far from the truth. Success will require hard work, dedication and the occasional pitfall. This is why it is important to recognise some of the most common errors made by novices. It can be argued that greed plays a critical element, as this emotion often affects your judgement. Maintaining an objective viewpoint is therefore essential. Some other mistakes to avoid include:
- Becoming overly involved in high-risk assets.
- Not performing an adequate amount of research in advance.
- Utilising a substandard trading platform.
- Spending beyond your means.
- Failing to create a diversified portfolio.
Whether you wish to become a full-time trader or online investing is simply meant to satisfy a part-time hobby, there are a number of opportunities to leverage if you know where to look. The main point is to maintain a realistic perspective on what you are trying to achieve as well as the associated time frame. If you adopt a pragmatic approach, you may very well be capable of creating a lucrative side hustle.