PROVO, Utah – The investing public is being sold short by media and advertising claims alleging easy and instant wealth through online trading, warns Ross Jardine, co-chief executive officer of Online Investors Advantage, an investor education company.
Investors are lured.
“Investors around the world are risking losing their investments – lured by aggressive advertising and publicity that tout the lucrative prospects of online investing,” Jardine said.
“Daily, the public hears stories of the huge fortunes made through day trading, reads advertisements about the ease and low-cost of online brokering, and visits personal finance Web sites that offer instant information.”
According to Jardine, the media hype may be creating unrealistic expectations, leading many investors down a path of financial uncertainty.
“In today’s volatile stock markets, if you don’t know what you are doing, you are destined for failure,” Jardine added. “For many, online investing is just a faster way to go broke.”
Jardine asserts the chief problem with online investing is the fact the average investor can be simply overwhelmed by information overload – much of which can be attributed to the Internet.
“There are literally thousands of online investing Web sites, many of which promote pages and pages of financial information, all the while enticing investors to jump right in and actively make low-cost trades,” Jardine said.
“However, the investor does not know what to do or how to separate the useful information from the insignificant. Too much information is confusing to the average investor, making it useless or even harmful.”
Jardine continued, “Because of media hype, investors are jumping on board the online bandwagon, only to find themselves literally drowning in information, while starving for knowledge.
Learning the hard way.
“Too many people are learning about investing the hard way – by losing their investments. This is a school of hard knocks that becomes a very expensive education for any investor.”
Jardine’s advice to online investors is to remember that even though active investing is important, there is no substitute for responsible investing. The responsible investor takes time to learn to understand the differences between a good and a bad company.
Do your homework.
The responsible investor also takes time to research companies and potential investments before jumping into the market.
“With so many tools available today, investors are looking for better ways to invest actively and responsibly, while trading safely,” Jardine said.
“Consequently, the demand for online investing education has increased significantly since online trading became commonplace in the late 1990s.”