Online Stock Tips

Traditional stock investing requires placing orders through a stock broker who charges a fee or commission in exchange for trades and investment advice. The Internet gives investors access to several online stock brokerage services, such as E-Trade, ShareBuilder and Scottrade, which allow investors to buy and sell stocks with minimal fees.
Research Before Investing
Online stock brokerage services make it easy for anyone to purchase stocks; but just because it is easy, it doesn't mean you should jump into it quickly and use all of your investment money to purchase a smattering of stocks. Take time to research each investment you make. You should understand how a company delivers value and why the company could be expected to perform well in the future before investing. Avoid the temptation to follow the advice of well-meaning friends or coworkers without performing due diligence on investments yourself. Good advice is helpful, but bad advice can be disastrous.
Be Wary of Fees
Although online investing may offer lower per trade fees and commissions than using a standard brick and mortar stock broker, that does not mean that the fees are insignificant. Read all the information you can when signing up for your online stock service so that you understand the fees and charges that apply. Some accounts may offer reduced fees if you make trades on a set schedule. Avoid the temptation to treat online stock trading like a game and make trades too often. The more often you place trades, the more you will incur transaction fees, which will serve to reduce your return on investment. Stock prices can fluctuate greatly in short periods of time, such as a month, week or even a day. Investing for longer periods of time, a year or more for example, is a way to limit the impact of short-term price volatility.
Trade Delay
Don't assume that placing a trade using a "real-time trading" service online means that the trade will occur instantaneously. According to the SEC, technological "choke points," such as heavy Internet traffic and problems with the user's modem, computer or Internet Service Provider can cause trades to be delayed. Also, don't assume that a trade failed if it does not appear immediately -- if the trade was delayed for some reason, it might not appear in your account right away. If you assume a trade failed and try to make the same trade again, you might end up making the trade twice by mistake.

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