Yesterday I laid out the risks and rewards of investing and trading stocks online.
As I said, it's easy to do and actually kind of fun, but like going to Vegas, you have to be able to walk away from the table if you're losing money.
To help you avoid that, if you really want to start trading online, here's what I look for in a good online investing/trading web site. Lord knows there are plenty of such sites -- some good and many bad.
To know the difference, and to really reap the benefits of online investing provides, be sure to look for sites that provide the tools you need to successfully manage your investments.
Specific features to look for include:
1. An accessible web site with easy navigation.
2. A well-organized trading screen with built-in safety guards to prevent data entry errors.
3. Access to real time quotes-current stock prices displayed on the screen.
4. A quick confirmation system.
5. Current portfolio updates and account balances.
6. Easy access to customer service-preferably 24-hours a day, 7 days a week.
7. A low minimum dollar amount to open an account.
8. The ability to conduct buy or sell stops, which instructs the system to buy or sell a specific security automatically when it hits a predetermined price.
9. A full range of investment vehicles including stocks, bonds and mutual funds.
10. Automatic sweep of un-invested cash into a money market fund.
If you can find a site with most or all of these attributes, you're doing good. Keep your risk comfort level in mind and know how much money you can afford to lose. Most financial advisors say to use only 5% or 10% of your total assets when trading online. No more than that.
Happy cyber-trading.
