How to Develop an Online Trading Portfolio

Online trading has become big business, but for those of you who are new to this investment process, it can also lead to big problems. Choosing the right website to handle your trades and set up your portfolio is essential to success and financial well-being.

Instructions

Difficulty: Moderate

1. Check out and compare fee schedules of online trading sites. Determine how much they charge per trade; if there is a monthly fee for handling trades; and if they charge extra for investment research. Also check to see if there any "hidden" fees.
2. Research the research tools available on the websites. Accuracy is the key. Reports on companies should be up-to-date containing more than just a company history. There should also be links to news and other information on the company's strategies.
3. Determine if the broker can get you the best price for the stock in which you want to invest. Information on how often they make trades is usually available on the trader's website.
4. Find out what limitations there are on trades and any fees associated with them. Some offer "real time" trades and others make trades at specific times of day.
5. Find out if your trade will still go through if the website goes down. The online broker should have an alternative way to execute trades if there's an outage.
6. Check out the website's privacy policy. Make sure they won't use your name and email address for promotional mailing lists or sell them to online marketers.
7. Keep concise records in case a problem should occur. Know how to contact customer support in case of a problem, and make sure they're able to give your case prompt attention.
8. Check out the online trader's reliability with your local securities division. They should be able to provide information on disciplinary actions and the firm's registration status.