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Published:
August 27, 2019

Online Investing For Dummies

Overview

Build a winning portfolio—and reduce your risk—with this bestselling guide

Online investing has never been easier—or more potentially confusing. Now that every broker or finance site has its own app, data, or approach, it can be all too easy to be misled and make a bad decision. Online Investing for Dummies helps you reduce risk and separate the gimmicks from the gold, pointing investors of all experience levels to the pro-tips, calculators, databases, useful sites, and peer communities that will lead to success. 

Updated to include information on mobile trading and the influence of social media on the markets, the book also covers the basics—showing you how to figure out how much to invest, find data online, and pick an online broker. It then progresses through to more advanced topics, such as calculating returns, selecting mutual funds, buying bonds, options, commodities, and IPOs, taking you and your money wherever you want to go in the global market.

  • Set expectations and assess your risk
  • Analyze stocks and financial statements
  • Assemble the suite of tools to calculate your performance
  • Get tips on choosing the right online broker and on protecting your information online 

It’s time to get a pro strategy, and Online Investing for Dummies has all the inside information you need to build up that winning portfolio.

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About The Author

Matt Krantz is a nationally known financial journalist who specializes in investing topics. He's personal finance and management editor at Investor's Business Daily. He's also worked in the financial industry and covered markets and investing for USA TODAY. His writing on financial topics has also appeared in Money magazine, Kiplinger's, and Men's Health. Krantz is the author of Fundamental Analysis For Dummies and co-author of Investment Banking For Dummies.

Sample Chapters

online investing for dummies

CHEAT SHEET

Whether you’re new at investing online or a grizzled veteran, you can always find better ways to make the internet work for you and your portfolio. You’ll want to make sure you know a few basics before you get started. And some tricks of the trade will literally help you to trade. Finally, you’ll want to know the terminology of investing online to make sure you are talking the talk.

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Articles from
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Before you start investing online, take a look at the following three tips. These tips are short, but they might save you some time and trouble later on. Quickest way to get stock information. If you’re in a hurry and want basic information about a stock, fast, hit the search engines. Enter a stock’s ticker symbol into the search field in all the popular search engines including Google and Bing.
When you first start investing online, you're bound to run into some terms or concepts with which you're unfamiliar. Don't sweat it. Following are some key terms you should become familiar with before investing.Active investor: An investor who tries to routinely beat the rest of Wall Street by a wide margin. Active investors have many different strategies, including trying to buy stocks when they think they’re cheap or stocks that have been rising rapidly in the recent past.
People who invest online are usually do-it-yourself investors. This means they're probably working without a tax consultant. But this can make it hard to understand how the money they earn while investing is taxed. That's where understanding capital gains taxes enters the picture.When you sell a stock held in a taxable account that has appreciated in value, you usually have taxes to pay.
If you are investing online and have a taxable brokerage account, you need to understand how dividends work. Remember that a dividend is a distribution of a portion of a company's earnings to some of its shareholders. Dividends can be issued as cash payments, stock shares, or even other property.Dividends are paid based on how many shares you own or dividends per share (DPS).
Before you can analyze research reports for your online investments, you have to get your hands on them. Several techniques are available to do this online — some cost you money, but many don’t. The following list highlights a few resources of both the free and not-so-free types: Online brokers: You don’t have to be a client of the full-service brokerage firms like Credit Suisse or Goldman Sachs to get their analysts’ research reports.
As an online investor, you might be interested in finding out how many investors are shorting a stock you own, a statistic known as short interest. Some investors even incorporate tracking short interest in their strategies by seeking stocks that are heavily shorted, on the theory if the shorts are wrong, the stock might surge higher in a short squeeze.
Investors are on a constant quest for the best online broker. But just as different headphones, cars, and strollers fit different people’s needs, the same is true with brokerages. Investors have different goals, taste for risk, and resources. And that’s why one person’s broker can be perfect for him or her, but completely wrong for you.
Online investors commonly look at the price-to-earnings ratio, or P/E ratio, of an individual stock to find out how expensive it is. The higher the P/E ratio, the more richly valued the stock is. But Exchange Traded Fund (ETF) investors can also use P/E ratios to find how cheap or expensive the stocks held by the ETF are.
Are you the impatient type? Do you just want to get started investing online right away? Here's a quick step-by-step list to get you going: Save your money. You don't need much to get started investing, preferably $50 or more. Find an online broker with no minimum deposit. Learn the terms. Investing is full of jargon.
When you’re buying and selling investments online, it pays to be extra careful to make sure your personal and financial information doesn’t get stolen by cyberthieves. At the very minimum you should protect yourself by Locking down your computer. You’ll want to make sure your computer is running antivirus software, which protects your files from malicious code, at the very least.
Ordinarily when you invest in stocks online, you hope to profit from a company's good times and rising profits. But there's a whole other class of investors, called shorts, who do just the opposite. They search the internet for news stories about diners getting food poisoning at a restaurant, for instance, and look for ways to cash in on the stock falling.
Trading in stocks online is not like shopping at your local major retailer, where prices are set. Because investments are priced in real time through active bidding between buyers and sellers, there are techniques to buying and selling. When dealing with investments, you have five main ways to buy or sell them online: Market orders: This is the most common type of order.
The deep discounters are the Walmarts and Home Depots of the brokerage world. When you sign up for a deep discounter, you are on your own. But if you know what you’re doing, that’s a good thing because you don’t have to worry about getting pestered by a salesperson trying to pitch stocks you have no interest in.
Whether you’re new at investing online or a grizzled veteran, you can always find better ways to make the internet work for you and your portfolio. You’ll want to make sure you know a few basics before you get started. And some tricks of the trade will literally help you to trade. Finally, you’ll want to know the terminology of investing online to make sure you are talking the talk.
If the thought of being completely on your own as an online investor makes you nervous but you’re not willing to give up low-cost commissions, the discount brokers sit in the sweet spot for you. These brokers suit most investors ranging from beginners to the more advanced because they generally offer some advice (if you ask for it), and many have offices in most major cities.
Robots are entering the financial world. So-called robo-advisors are essentially online tools programmed to pick the perfect portfolio for you. You log in to the robo-advisor and tell the computer how much risk you can stomach and your financial goals. The algorithm spits out a recipe of what exchange-traded funds (ETFs) you should own.
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