Online investing is a trend that has emerged from the growing popularity of internet use and investment. Online investments are more about processes than money. Investors, managers and companies all benefit from this convenience. Online investments can be made in the form of shares, mutual funds, securities or deposits.
Online investing has many benefits. Trading goods and services online is now a common practice, thanks to the widespread use of computers and the unprecedented advances in communication technology. Online trading is a great way to save time and money. The computerization of data collection has led to a significant reduction in the time required for data compilation and data collection.
Prior to the advent of online trading, investing in mutual funds or term deposits or trading shares required a lot of paperwork. The verification of data took a lot of time and could take days. It was not uncommon to lose data, resulting in a loss of time. Oversubscription is common for investments in securities. Refunds are given. Trading in shares, or IPOs (initial publicly offered), was done in the stock exchange before online processes became popular. The exchange was always crowded with subscribers, managers, brokers and other people.
Trading and investing look the same. It is interesting to note that only the trader/investor can determine if a particular stock purchase was made for trading or investment purposes. Although the procedures are the same, they serve different purposes to the investor. It is one of novice investors’ biggest mistakes to mix up the two. When they buy stocks, they have no plan or goal in mind. They purchase stock because it is selling well, but they are clueless about the future.
Investing is when you buy shares in a company with the expectation of earning good dividends, but have no intention of selling them soon. Trading is when you buy a stock with the intention of selling it soon after the price increases. You can sell quickly, even if you initially planned to keep the stock. Or you can choose to not sell quickly if you had intended to at the time you purchased it. It is okay to make changes based on the circumstances, but it’s important that you have a plan in place at the beginning. This is because investing and trading are two different things. Investors tend to invest in companies or industries they believe are poised for growth, whereas traders only care about short-term price increases.
These examples show that the investor is the most serious person and is sought after in the financial market because he is willing to invest and keep his investments for a long time, while the trader acts more like a opportunist. (Though there is nothing illegal or evil about the practice). You can choose the best stocks if you know if you’re going to invest or trade. Sometimes, stocks that are good for trading may not be good for investing. Stocks that are suitable for long-term investment may not be appropriate for trading. In times of stability and economic growth, people are more likely to invest in stocks. However, they will trade in times of volatility or unrest.
