Connect with us

Cryptocurrency

Looking Forward: A Starter Guide to Digital Investing

Published

on

According to Gallup, 58% of U.S. adults admitted to owning stock shares. If that’s you, or if it sounds like it could be you in the near future, you’ve picked a great time to get into investing.

Even so, however, many would-be investors are faced with a serious asset-buying hurdle:

Accessibility.

For people who are constantly on the go, dealing with traditional brokerage arrangements can be both time-consuming and unnecessary. And if you’re interested in digital currency and crypto, your investment options may be even more limited.

Luckily, there’s a 21st-century answer to this investing dilemma. You can take up digital investing.

How do digital investments work and how can you use them to boost your portfolio? Keep reading to find out.

What Is Digital Investing?

Raise your hand if you’ve experienced this before.

You’re trying to buy shares. But you’ve also got a bunch of tabs open because you need your finance news, your spreadsheets, and your indicators to be within easy reach of the phone before you get on the phone with your broker.

And if you haven’t lived through this, it probably doesn’t sound like the kind of investment experience you’ve been going for. After all, wouldn’t it be easier to have an all-in-one investing solution?

Like the name says on the tin, digital investing speaks to the process of using tech-enabled platforms, like apps and in-browser solutions, to invest, buy and sell shares, and manage your finances. If you’re investing online through your bank or using an online broker, you’re a digital investor.

Why Should You Go Digital?

With many employer-provided 401ks and mutual funds, you can invest for years on end without ever going online. However, there are several reasons why digital investing is a great idea for individuals who are looking to make self-directed investments:

1. You Can Be in the Driver’s Seat

By the numbers, the average 401(k) will give people around 27.5 options to invest in. Although you’d think that would be enough for a healthy investment mix, these plans can often be less profitable than they might seem at first glance.

Management fees could eat away at your returns. Individuals with an interest in digital currency and bitcoin investing may be unable to invest through traditional means. And if you believe that Bitcoin will be worth millions by the time you’re ready to retire, these limited options could cost you a significant chunk of money.

See also  Reasons Why You Should Go For Cryptocurrency

Digital investors have the ability to take control of their finances. If you feel like the current selection of investment opportunities is lacking in your group plan, you can get an online account and start investing today.

2. You Have Direct Access to Your Money

If you want to self-direct, there are multiple steps involved with the traditional process.

First, you have to see an opportunity. Then, you need to give instructions to your broker. After hearing from you, the broker will then execute the trade on your behalf.

In these circumstances, deposits and withdrawals can take multiple days to complete. And if your bank has a clearing process, the delays can go up even further.

Digital investing, however, is different. Along with the ability to implement your preferred investment approach, you can often manage your funds with ease. In fact, depending on the platform, you may even be able to make instant deposits.

When you see an opportunity and you need to cash in ASAP, you don’t want to deal with all the time wasted by your funds being in transit. As a digital investor, you’ll be able to get the funds you need when you need them.

3. You Can Try Out New Investing Strategies

If you ask 10 people how to create a winning investment strategy, you’ll likely get 10 different answers. Why? Because every investor has their own unique spin on the market.

Some people look for undervalued stocks. Others are highly technical. And while swing trade investors and buy-and-hold investors may enter positions at the exact same time, the methodology involved is often vastly different.

Many group plans will force you to go with the trading philosophy of the bank’s fund management. But as a self-directed digital investor, you can play around with options, short-term trades, and riskier purchases. Better yet, you can run these experiments directly from the comfort of home.

That type of experimentation just isn’t as accessible through other methods.

How to Know You’ve Found the Right Digital Investing Platform

Okay. Let’s assume for a minute that you’re 100% sold on digital investing as a medium.

There are tons of foreign and domestic online brokers to choose from. Plus, with 97% of Americans listing themselves as proud smartphone owners, banks and traditional brokers have developed their own platforms too. How do you pick the right one?

Here’s a short list of questions to ask yourself when choosing a digital investment platform:

1. Does This Platform Have the Assets I Want?

In 2021, 83% of millennial millionaires had some form of cryptocurrency in their investment portfolios.

Although Bitcoin investing and cryptocurrency are becoming more mainstream as a general rule, you may have a difficult time purchasing crypto directly through your bank.

You may have to expand your approach to investing. With cryptocurrency, for instance, you may need to maintain a wallet while purchasing mutual funds through a well-respected online broker. If you want to purchase gold or another precious metal, there are rules in place for doing so.

As a general rule of thumb, however, you don’t want to be maintaining ten investing accounts instead of one or two. For this reason, you’ll want to look closely at the exchanges, categories, and shares available through your online broker.

See also  Securing Your Crypto Assets: A Comprehensive Guide to a Secure Crypto Experience

2. Does the Platform UI Make Sense?

Have you ever been on a website that required you to click a bunch of links, enter a ton of codes, and do a few backflips to make a purchase? In marketing, businesses are always being advised to make the sales experience as friction-free as possible. All it takes is one bad experience for customers to walk away for good.

If you’re like most people, chances are you won’t be logging into your investing account as frequently as your social media accounts. But you still don’t want to be in a situation where the platform is so clunky that buying stocks is more complicated than learning physics and climbing Mt. Everest at the same time.

Is it easy to find the functions you’re looking for or does everything seem complicated when you’re on the platform? Don’t underestimate the importance of making sure that the platform is easy and enjoyable to use.

3. Is the Fee Schedule Transparent?

As anyone who’s ever been hit with fees after a free trial can tell you, the details are always available in the fine print. And if you’re a frequent trader, spreads, currency exchange rates, and transaction fees can eat away at your profits.

For investors, trading fees aren’t anything to be concerned about. After all, it’s just the cost of doing business. But if the fees aren’t being clearly spelled out or the reviews all have a common cost-related theme, you’ll want to proceed with caution.

To that end, a clear fee structure isn’t just nice to have — it’s an absolute must for digital investors.

4. What Additional Features are Included?

Contrary to popular belief, it’s not enough for your digital broker to come with fully equipped buy and sell capability. As an investor, you’ll never run out of reasons to research your current and future assets.

As such, it’s not unusual for brokers to include account features like:

  • Graphs
  • Technical indicators
  • Price alerts
  • News and analysis

If you’re already subscribed to a different investing platform, you might not need all of these additional bells and whistles. But even so, there’s nothing wrong with grabbing these resources for free if you can.

5. What’s the Customer Experience Like?

Think fast.

You’ve deposited funds and you’re trying to enter a position. But all you’re getting is the loading symbol. How can you fix this?

You’ve found the trade of the century and you’re scrambling to login. You’re trying to change your password, but you’re not getting a password reset email. What can you do?

When you’ve got your retirement plans and your finances on the line, you can’t afford to deal with delayed customer service. Before you start handing over your personal information and your funds, you’ll want to ensure that the platform has a dedicated customer support team. That way, you won’t be left hanging in a worst-case scenario.

6. Does the Platform Have Growth Potential?

Investing is like learning how to ride a bike.

See also  7 Tips to Help You Store Your Cryptocurrencies Safely

At first, you probably relied on training wheels. And then, you started riding a two-wheeler before buying bigger bikes as you grew up.

But even as an adult, there are levels to bike riding. A professional mountain biker, for instance, will have different standards than someone who takes a leisurely ride on the biking trails every other summer.

Here’s the bottom line:

Don’t evaluate platforms on the basis of what they can do for your today. Think about whether they can handle the account balances and trading strategies that you plan to use in the future.

The Two Digital Investing Best Practices Everyone Should Know

Statistically speaking, professional and amateur investors alike struggle to beat the market over time. Digital investing can give you some advantages, but maximizing those benefits is often easier said than done.

Fortunately, the secret to a successful digital investing career can be boiled down to two items:

1. Use a Practice Account

A quick Google search will reveal that there are tons of investing strategies to choose from. When you’re purchasing managed funds, you don’t have to concern yourself with the minute details. But if you plan to control your account, the responsibility falls on you.

It’s extremely hard to make money in the traditional stock market on pure gut instinct. And if you step into unforgiving markets like cryptocurrency or forex, you can lose a lot of money if you’re not careful.

One way to circumvent this issue is to use a practice account. That way, you can refine your strategy without putting your own account on the line.

 

2. Have a Security Plan for Your Digital Assets

When you deposit money in the bank, robbers are probably the last thing on your mind.

The bank has insurance and security. Law enforcement will work hard to catch bank robbers. In short, institutions will work with the government to ensure that your funds are safe and untouched in your account.

With cryptocurrency and other digital assets, however, it’s not that simple. You have to assume that there are digital thieves lurking around every virtual corner.

If you’re considering Bitcoin investing, even purchasing coins can be fraught with danger and shady characters. You can click this link to learn more about how to use a kiosk for safer buying and selling. And that’s one of the many precautions that you may want to take as a crypto investor.

Transform Your Finances With Digital Investing

On paper, there’s a lot to like about digital investing. You can decide what, when, and how you want to invest. And, you can experiment with different strategies while making a ton of money.

For investors who are interested in purchasing experimental assets like Bitcoin and other cryptos, digital investment platforms can give you access to more opportunities. If you’re ready to put your investment theories to the test, digital investments are the way of the future.

Was this post helpful? There’s more where this came from! Check out the rest of our site for more content like this.

 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2020 - 2021 TechZimo.com, All rights reserved.