Some might jest that online investors are spending less time trading during these days of unprecedented market volatility and more time on Google Maps, searching for the nearest and highest bridge to jump off.
In reality, however, many DIY investors are relishing the control they have over their portfolios as markets see saw back and forth, and they wouldn't have it any other way. Volatility is opportunity for any [online] investor who is willing to respond to the market as opposed to predicting the market, says Ron De Appolonia, general manager of the Online Trading Academy, a school that teaches the craft of online investing.
``If you want to put your money in and close your eyes, that doesn't work,'' he says. ``Investing online is not for the buy and `hope' individual.''
De Appolonia believes that the ability of self-directed investors to take control of their investments and react immediately and intelligently to the market's ebbs and flows is a key advantage in tough times, like now, that gives them a leg up on those who employ a financial adviser or planner to manage their money.
He says a financial adviser's interests are rarely aligned with an investor's best interests, noting nowadays, as losses mount on Bay Street and elsewhere, most advisers are telling their frustrated clients to hold their stocks and sit tight. ``It doesn't make sense in any business to hold a loser. There is a good time to get in and good time to get out. The notion of holding forever is silly,'' he said.
John See, president of TD Waterhouse Discount Brokerage says the number of investors joining the online ranks continues to grow despite the difficult trading year its been. Not only are volumes growing due to the volatility in the markets, but so too, See says, are account openings. Year-to-date account growth is up 25 per cent to 30 per cent from the previous year, he says, with asset inflows exceeding that growth.
``Retail investors continue to recognize the Internet gives them access in a cost effective manner to products, tools and research that was once only available to professional money managers. They realize that they can easily create a diversified portfolio on their own.''
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