In our crazy, over-stimulated young professional (YP) lives, time and efficiency are, of course, of the essence. Especially with developments in mobile communications in the past 5-10 years, we turn to the online world to make our lives easier in everything from reading the news and researching car purchases to booking travel and even (shamelessly) dating. Keeping with the trend, investing online and researching investment options is, slowly but surely, also gaining popularity. A growing number of Canadians now manage their investments online, and a recent survey by TD Direct Investing found that many enjoy the convenience of the internet to manage their financial future, with 41 per cent researching investment options online and 22 per cent managing their investments online. In addition, 13 per cent said they invest online more frequently than they did five years ago. With that said, a surprising amount of people still don’t invest online. According to the survey, despite being among the world’s top Internet users, three quarters (72 per cent) of Canadians still don’t manage their investments online.
The benefits of online investing are plentiful. With managing your own investments comes the ability to view and make changes to your portfolio where and when it’s convenient for you and the power and control over investing for your financial future. Why aren’t more YPs (and other groups) investing online? Apparently, for a number of reasons. Rowena Chan, Vice President, TD Direct Investing, tells us that, despite the gaining popularity of online investing, there are a few misconceptions that still hold Canadians back.
Lack of knowledge:
The top two reasons why Canadians don’t invest online are that they prefer to receive investment advice (47 per cent) and they don’t feel like they know enough about investing (38 per cent).
THE MYTH: You need to know a lot about the markets to invest online.
THE FACTS: When you invest online, you have access to tools and research to help you decide which investment options can help you meet your financial goals. Many online investors start with a small portfolio, familiarize themselves with the platforms and tools, and gradually increase their portfolio when they’re comfortable.
Fear of making a mistake and losing money:
Nearly one-third (30 per cent) of Canadians say online investing “seems risky” and they don’t want to make a mistake and lose money.
THE MYTH: Online investing is risky.
THE FACTS: It’s the products and the investment approach that determine risk, not whether you decide to invest online or with an advisor. There are educational seminars and tools that can help you determine your risk tolerance and select your investments accordingly.
Lack of money:
More than a quarter (28 per cent) of Canadians say they don’t have enough money to invest.
THE MYTH: You need a lot of money to start investing online.
THE FACTS: It’s important to be in control of your finances and investing online can be a great way to help you work towards your financial goals. You don’t need to start with a lot (there aren’t any minimum amounts to open an account), and you can continue to build your nest egg through your online investments.
“Self-directed investing is a great way to manage your investment portfolio – and it’s never too early to start planning and saving,” says Chan. “There are a wide variety of innovative tools and resources available to support investors in their long-term strategies and help them make informed decisions. That’s one of the reasons we recently changed our name to TD Direct Investing from TD Waterhouse Discount Brokerage – to reflect that our services enable investors to personally navigate the markets, and help them become confident and successful investors.”
With the March 1, 2013 RSP deadline just around the corner, Chan offers some tips and online resources that can help you get started and meet your financial goals:
Decide what you want, and how you’ll get there
There are helpful tools online such as calculators that will help determine what you need to reach your financial goals. There are also a variety of research resources online including articles, webinars and online videos.
Make your financial future a priority
It’s important to invest the time to research, determine your strategy and get comfortable with the different products and platforms at your disposal, especially if you’re a new investor. This will give you greater control and flexibility to manage your portfolio when and where it’s convenient for you, either at home, at work, or on the go with the TD Mobile App.
“When you invest online, you control your portfolio, and you still have access to tools and resources, so you can be confident you are taking the right steps toward your goals,” says Chan.
Start slowly, then work your way up at your own pace
You can start by moving one or a few of your investments online until you’re familiar with the platform and tools. Once you’re comfortable, you can use direct investing to more actively control your entire portfolio.
“There are a variety of online resources and platforms available, tailored to investors at any level, from new investors, to experienced and active traders,” adds Chan. “If you have questions, we have 24/7 support available online and by phone, and well as in-person support in our 33 investor centres.”
For more information about TD Direct Investing, visit www.tddirectinvesting.ca.