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Seven healthy habits for online investors

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By Peter Kenter (C) 2017 Postmedia Network Inc.
You chose an online brokerage, so you’re ready to take control of your investments. Here are seven tips to start you off on the right foot.

It’s easy to get started in online investing, but developing a sound knowledge base and a respect for the markets is the first step to success.

Online investing offers investors round-the-clock access, efficiency, ease of use and lower trading costs than investments managed by an advisor. Paired with an effective online investing platform, here are seven healthy habits that can help investors fully appreciate those advantages and ensure a positive experience:

Understand investing to understand online investing.

It’s easy to get started in online investing, but developing a sound knowledge base and a respect for the markets is the first step to success. While bold market predictions make for fascinating television and news headlines, there’s no substitute for solid market research. An online investment platform should provide a wide range of investor information generated by reliable sources.

It’s easy to get started in online investing, but developing a sound knowledge base and a respect for the markets is the first step to success.

Learn to walk before you run.

Online investing platforms offer significant capabilities to investors, but they should avoid the temptation to fire on all cylinders until each capability is fully understood. It isn’t possible to know everything there is to know about online investing on the first day, so start simply and slowly master each skill and strategy before moving on to the next. Take advantage of online resources, such as BMO InvestorLine’s tutorials, webcasts and Wealth Exchange blog, to develop greater understanding.

Develop the discipline required to execute an investment strategy.

Knowledge is power. But it’s only powerful if investors develop the discipline to apply it to their investing strategy. Investing can inspire a lot of emotion, so investors should learn to remain true to their pre-determined goals and investing guidelines, while filtering out the noise and excitement surrounding the markets. They should also resist the urge to trade just because they can, and trade instead to support their strategy.

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Keep an eye on trading costs.

Online investing has gained traction with investors in part because it’s brought the cost of trading down significantly. However, the cost of frequent trading can have a significant impact on investment returns over the long run. Consider the impact of trading costs on the value of the portfolio.

Use apps to their best advantage.

Mobile apps offer continuous access to an online investing account, providing the capability to receive information and alerts 24 hours per day. BMO InvestorLine , for example, offers investing apps for both tablets and mobile phones. Yet while apps can bring the market anywhere, there’s usually no reason to feel compelled to constantly monitor and manage one’s portfolio or react to every alert.

Learn to recognize reliable information sources.

With the vast quantities of information available to investors, some of it is bound to be correct—much of it isn’t. Learn to recognize reliable information sources and to place that information in the context of predetermined investment goals.

Stick to the fundamentals.

There are no shortcuts, whether you are investing traditionally or online. Research your strategy, ensure that your portfolio remains diversified and keep investment costs under control.

This story was created by Content Works, Postmedia’s commercial content division.