5 Ways to invest smarter this year
- Considering the stock market, as a means of diversifying your investments, is a great way to invest smarter.
- Through online trading platforms like Mexem, investors can manage their portfolio at the touch of a button.
- Among other things, online trading is cheaper, faster and more accessible.
It’s a new year, a new decade and another reminder that time flies. With any investment portfolio, time is one of the best tools to have on your side - whether it powers the growth of compound interest or allows fluctuating stocks scope to mature. So why not embrace the time that you have and rethink your investment strategy for 2020?
Some timeless advice from The Intelligent Investor by Benjamin Graham is to divide your assets equally between bonds and stocks in order to balance risk. Although asset allocation is one of the most popular investment portfolio techniques today, there’s no harm in revising your allocation annually. Considering the stock market, as a means of diversifying your investments, is a great place to start.
One of the largest barriers of entry into the stock market is the need to manage your entire portfolio and make all trades through brokers – which can be inconvenient. Luckily, we’re deep enough into the 21st century that even trading has gone digital.
From being more accessible to leading the way with lower fees, here are 5 ways to invest smarter this year through online platforms.
1. Pick up the pace
Maximise the speed and efficiency of your trading with platforms like Interactive Brokers’ TWS - a trading software tool that helps investors navigate the stock market. The platform is provided to investors by Interactive Brokers – one of the largest online trading platforms globally. The use of real-time market risk management enables investors to understand and manage their trading risk at any given moment of the day in order to react quickly to changes in the market.
2. Be more flexible
Gone are the days when trading meant phoning your broker to arrange purchases or sales. With just a few clicks, trades can be conducted anytime and anywhere via mobile devices or laptops, giving investors even more flexibility and freedom through trading on the go. Modern trading platforms are also simple enough that investors don’t need to go through middlemen.
3. Beware of hidden costs
Don’t be fooled by the seemingly complex and hidden costs of investing. From minimum balances to withdrawal fees and monthly management, your broker’s commission can add up to make a significant difference to the success of your trading. Luckily, as more and more brokers are offering online trading, the costs of dealing online has decreased considerably. Opting to invest through affordable online platforms like Mexem can give you access to lower commission structures without any monthly fees.
4. Take time
Investing is a marathon, not a sprint and investing your money for longer periods of time is generally a good idea. “If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes,” Warren Buffet, renowned investor and CEO of Berkshire Hathaway, famously said. Give your investments, regardless of the type, time to grow and fluctuate so that they can work for you when it’s your time not to work anymore.
5. Go global
For many South African investors, the potential of global investment has not been fully realized yet. However, Mexem is pioneering a new era in offshore investing for SA investors that allows you to trade in more than 120 markets across 23 currencies. From stocks and options to bonds and currencies, consolidating all your trading on one trading account can open the world for your portfolio.
This post is sponsored by Mexem produced by Brandstudio24 for Fin24 and Business Insider SA.