Global Internet usage has increased exponentially since the dawn of the World Wide Web, with just 0.4% of the world’s population active online in December 1995.
This figure had increased to 62% by June of this year, with more than 4.8 billion people now accessing the Internet on a regular basis across the globe.
From an investment perspective, however, the question that remains is whether it’s safer to invest your money online in 2020 than pursuing more traditional methods. Let’s find out!
Online vs. Traditional Investment Methods
For the purpose of this article, we’re going to discuss the fundamental differences between using a traditional broker or financial advisor and investing online through virtual brokerage sites and platforms such as the MetaTrader 4.
With the former, you’ll discuss your budget and investment goals with a trained and fully qualified advisor, before finalising your portfolio and allowing your chosen partner to manage the investments over an extended period of time.
When it comes to online investment, you’ll be required to sign up to a licensed brokerage site that has been accredited by the Financial Conduct Authority (FCA), before you start to construct your own unique portfolio and manage this independently.
While some may argue that traditional investment methods are safer as they enable you to draw on the experience of a proven advisor, this underestimates the quality and depth of information available through online brokerage sites.
More specifically, online platforms boast direct access to expert technical analysis and news stories, while they also offer an advanced suite of analytical tools and various indicators for empowering informed real-time trades.
This also leads us onto the fast-changing and volatile nature of markets such as the foriegn exchange, which offer the potential for increased short-term profits even in challenging conditions.
By trading online, you can securely pursue these gains in real-time while simultaneously accessing effective risk-management tools, rather than on having to incur delays by relying on a third-party broker.
How to Make the Right Choice for You
While online trading may be becoming increasingly popular in the digital age, however, it’s important that you make an informed decision based on your own unique circumstances.
Firstly, it’s important to consider whether or not you understand the fundamental principles of investment. If you struggle with the mechanics that underpin specific markets or lack experience of corporeal investment, for example, you may benefit by liaising with an expert advisor who can provide support and successfully manage your portfolio.
Your budget and financial expectation are also key considerations, as those of you with vast capital holdings may look to work alongside an experienced advisor while accepting a percentage-based commission fee.
Online brokerage sites typically charge much smaller and nominal commission fees, and in this respect, they’re ideal for aspiring and part-time investors who want to slash their costs and retain control of their capital.