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10 tips for investing
online
By Jay
MacDonald
• Bankrate.com
Before venturing out on the Web
to buy, sell or trade stocks, do plenty of research. Online trading
can offer a self-directed investor a fast, thrifty way to manage
their investment portfolio, but it can also wipe out years of careful
saving.
Here are 10 tips from the North
American Securities Administrators Association to guide your decisions.
1. Receive full disclosure,
prior to opening your account, about the alternatives for buying
and selling securities and how to obtain account information if
you cannot access the firm's Web site.
2. Understand that most likely
you are not linked directly to the market, and that the click
of your mouse does not instantaneously execute the trade.
3. Receive information
from the firm to substantiate any advertised claims concerning the
ease and speed of online trading.
4. Receive
information from the firm about significant Web site outages, delays
and other interruptions to securities trading and account access.
5. Obtain
information before trading about entering and canceling orders (market,
limit and stop loss), and the details and risks to margin accounts
(borrowing to buy stocks).
6. Determine
whether you are receiving delayed or real-time stock quotes and
when your account information was last updated.
7. Review
the firm's privacy and Web site security policies and whether your
name may be used for mailing lists or other promotional activities
by the firm or any other party.
8. Receive
clear information about sales commissions and fees and conditions
that apply to any advertised discount on commissions.
9. Know
how to contact a customer service representative with your concerns
and request prompt attention and fair consideration.
10. Contact
your state or provincial securities agency to verify the registration
and licensing status and disciplinary history of the online brokerage
firm. This is also the agency to contact if you need to file a complaint.
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