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10 tips for investing online
 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.
- 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.
- 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.
- Receive information from the firm to substantiate
any advertised claims concerning the ease and speed of online
trading.
- Receive information from the firm about significant
Web site outages, delays and other interruptions to securities
trading and account access.
- 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).
- Determine whether you are receiving delayed or
real-time stock quotes and when your account information was last
updated.
- 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.
- Receive clear information about sales commissions
and fees and conditions that apply to any advertised discount
on commissions.
- Know how to, and if necessary, contact a customer
service representative with your concerns and request prompt attention
and fair consideration.
- Contact your state or provincial securities
agency to verify the registration and if applicable, the licensing
status and disciplinary history of the online brokerage firm.
Also, contact these agencies if it's necessary to file a complaint.
-- Updated: March 28, 2003
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