How to Invest Online

Video Transcript

"So you've got money to invest. Where do you go? What's the easiest way to do it? One thing that appeals to a lot of people is to utilize online trading. It's quick, simple, and generally pretty cost effective. Lots of big websites are out there. You can actually get easily overwhelmed with all the information. A couple of examples of some places you may want to check out would be a website called ETrade. They're what we call a discount trading house. ETrade offers the opportunity to online investors to purchase stocks, mutual funds, bonds, and other types of investments, including exchange traded funds, at a discount price. One thing that may be helpful to you if you consider going on a company's website, such as ETrade, you can also go on some of the mutual fund websites like the Vanguard Group, and they will offer you tutorials on how to invest in their funds and how to utilize online training...trading. A couple things to keep in mind are how much is that company going to charge you to invest or trade? Many times, there are what we call transaction fees. Those transaction fees occur each time you place a buy or a sell. You want to make sure that you keep those costs as low as possible. In addition, you want to make sure that you understand the trading requirements or investing requirements to choose the particular funds or stocks you're interested in. For example, are there minimums that you have to meet? Many times, mutual funds will have a minimum of 2,000 dollars or more to get in an initial purchase. Stocks can be done less expensively. However, the opportunity to diversify is lost if you are only able to purchase one or two stocks, whereas with a mutual fund, you're given the opportunity to diversify across a wide variety of stocks and/or bonds. Another resource that can be very helpful is a website called Investing Online Learning Guide. This is a website that gives you information on what you need to know and how to invest online. It's not sponsored by any one particular entity, so the information can be perceived as somewhat objective. In addition, the Vanguard Group offers some very good information in their learning library. You can log on to www.vanguard.com, and go to their learning library. Some of the topics that are available are mutual fund basics, how to begin your investing career, and women in investing."