How digital investment options really simplified things?
In the era of e-commerce when we have come to accept online discounts and cashback policies as the order of the day, it was but inevitable that a digital platform for trading and investments was to follow suit. In fact, the advent of a digital platform for investments has made life easier for many investors who had been wary of the hassle the traditional method of stock brokering entailed.
Are digital investment platforms better than the traditional ones?
There might be a few potential drawbacks to the online process of investment, especially for new investors who would like to be advised on their investment decisions by their brokers. However, there is no denying the fact that online investment options have made life easier for a number of investors. Nowadays, there are a number of ways in which you can use the digital platform for investments. You can trade in equity online, open a trading account online, book fixed deposits in your bank, set up recurring deposits, choose a SIP (Systematic Investment Plan) and even buy term insurance policies.
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How have digital investment options really simplified things?
In this article we shall explore five different ways in which online investment platforms have simplified the investment process for common people like us. Read on to find out more.
1) Low brokerage fees
The best part about investing in equities and trading on the stock-market through an online platform is the low brokerage fees involved. In fact, if you were to invest through traditional avenues, you would probably have to cough up nearly twice the amount of brokerage.
Despite the low brokerage, there is a flip side to the coin. In case you were investing through an actual broker, they would be more than likely to share personal opinion on equity investments based on their years of trading experience. However, online deals do not offer that opportunity. This is disadvantageous, especially for investors who are just starting out or do not have a very good idea about the stock market. Although, if you were thorough with your market research, knew the stocks you wanted to invest in and in short, did not feel the need of broker advice for investment, online trading would be a much sweeter deal.
2) Ease of availability
Another reason we prefer investing online is the easy availability. The internet is omnipresent and unlike the traditional market, the offices never close. Thus, you can invest at anytime from anywhere without having to go through long queues, being put on hold or any other associated hassles. You do not need to visit your broker, do not need to put aside an entire day to monitor the ups and downs of your investments in the market. Moreover, you can track the market situation from any place with a working internet access.
Moreover, unlike the time delay associated with traditional dealers, you can immediately implement a stop order through the internet or pull out your funds, thus preventing huge potential losses. Indeed, digital investment platforms have made life as well as investments easier for a lot of us.
3) Secured dealings
Most online trading and investment platforms offer secure trading for their customers. The risk of identity theft, credit card information theft and funds theft is minimal (unless of course you keep your PIN and passwords lying around, click on phishing links and give out information to every scammer who insists that you have won a grand prize of a gazillion dollars). Thus, with an online investment platform, you know you are dealing with a full proof system and your money is going into the investment vehicle of your choice. The risk of middlemen taking their share off the top of your hard earned money or brokers with fraudulent practices endangering your investments is eliminated. A transparent, convenient and easily accessible platform for investing is something that we applaud.
4) Complete Personal Control
Online investments gives you full control over your portfolio. On the other hand, if a broker was involved in the middle, you would have to intimate him with your decisions so that he could act on them at the earliest convenience. With online investments, the middleman is eliminated. You can choose to make any changes to your investment portfolio at any point of time and act on your decisions instantly.
This does open you to taking foolhardy investment decisions without deliberating on it enough, but then the fact that you have to live with your decisions makes you cautious about the actions you take on the web as well. And there never is any guarantee with the volatile market anyway, right?
5) Research tools
Most online platforms usually provide free research tools as well. With online insurance plans, you get online premium calculators. With SIP plans, you can have a simulation of how your wealth might grow over the years. FDs and RDs also come with online calculators that show you a clear picture of how much your capital investment can be expected to grow in a fixed amount of years. Thus, your investment decisions no longer have to depend on hearsay wisdom from your friend, cousin, colleague or fellow commuter. With well-structured research tools at your disposal, you can form a fair idea of the market yourself and decide where to invest according to your individual investment needs.
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Is online investment a good idea?
As is evident from our discussion above, online investments have a huge number of potential benefits. Although the third party wisdom from your broker is eliminated, you can have complete control of your portfolio and well-structured research tools in your hand. Your fund manager does not have the opportunity blind side you as well. Thus, unless you do not want to take financial decisions from the comfort of your home, have a particular aversion to conducting even the minimum amount of market research or are completely prone to taking foolhardy decisions when it comes to monetary investments, there are no reasons why online investments should not be a good idea. Happy investing.
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This is a guest post from Melanie Godinho who is a Certified Financial Planner by qualification and content developer by passion. She works at financialhospital.in and you can follow her tips at facebook.com/melgodinho
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