It would have been unheard of just twenty years ago when someone mentioned an online stock investing portfolio, much less a retail investor who was able to trade from the comfort of their homes. In both cases, there has been a large exodus from the myth straight to the realm of fact, as not only online investing a reality, the number of retail and casual investors have exploded since the past few years, with the numbers reaching almost monumental figures. This never seen before fact has led to many people realising the full power and potential of the internet not just as a sales platform.

As a partial and casual investor, creating an online stock investing portfolio doesn’t have to be difficult; it just is a matter of following some guidelines that, in retrospect, are actually quite basic and simple to understand. Many people who do embark on creating such a portfolio always seem to fall into the same traps, and make the same mistakes which then derails their whole investing career, no matter how casual. When you are starting on this track, you have to fully understand the market that you are going into and the online market is pretty different from the offline one. Of course, with certain interfaces and commodities that are traded, they tend to overlap.

The online investor is a very different one, and the large amounts of retail casual investors means that market momentum can be very pendulimic to a certain extent and much more volatile than offline markets. It is a faster paced market that needs much more attention, which of course is balanced out by the internet characteristic as a very responsive and relevant platform. Of course, you should know the market as a general rule of thumb, which means look at past records and technical analysis of the market and how it behaves. Stocks and bonds is a tricky business, and the value of the stock is correlated to the value of the company that it is attached to, so you need to be comfortable with the company that you are investing. This means that you need to know everything you can and in this case, knowledge is power.

With the level of transparency increased due both to demand and the exposure of more frauds all over the world, you will not be left wanting for market and corporate information you need. Also, stocks, bonds and shares are also tied to a particular commodity, and no matter what it is, you also need to have intimate knowledge of how it is surviving now and how its price will change in the next few months. Due to the economic crisis, many commodities like natural resources and farm goods have increased in price, while other commodities have decreased – so you need to read into the patterns and forecast the market from there. In this way, you will be able to create an online stock investing portfolio that is right for you and the next step? Diversify.

Getting into the stock market can be a fun and rewarding venture. For those who are unfamiliar with its ups and downs, the prospect can be a bit daunting though. Dealing with brokers can be a little frustrating. Some brokers are very easy to reach and will do a buyer’s bidding no matter what.

Others, armed with more knowledge than the investors, will sometimes be a little less responsive. Thanks to online stock investing, brokers can be virtually taken out of the mix for those who aren’t keen on dealing with a middleman directly.

Online stock investing is a fairly new concept that has opened a lot of doors for investors of all financial means. Everyone from retirees to schoolchildren have managed to get involved in online stock investing for a whole host of reasons.

There are some negatives to going this route to make investments, but there are a whole lot of perks that go with it, too. The cons for online investing involve the loss of a personal broker that can offer sound advice. When it comes to getting the best advice on what to buy, when to buy and when to sell, it’s hard to replace the expert.

Beyond that, however, online stock investing does have a lot of perks that make it accessible to virtually anyone. Plus, many reputable online trading sites provide access to trained brokers and investment counselors when their help is needed.

The overall perks of online stock investing include:

Ease: Most online trading sites offer very simple interfaces that enable users to quickly and easily buy and sell stocks. All that’s generally necessary is setting up a free account, sharing some information and inputting what’s required to pay for stock purchases. Most sites offer a lot of help for decision making and even navigating through purchases and sales, too.

Cost: The costs associated with trading stocks online will vary from site to site, but in general they are much more affordable than using direct brokerage services. Rather than charge huge per trade fees, these sites enable very small purchases and sales for pennies. This is what makes online trading so attractive to small investors looking to turn their milk money into extra cash.

Control: Online stock investing tends to put a lot more control into the hands of the investor. With direct access to buy and sell commands, these services help ensure that what investors want done is truly carried out. This can present both pros and cons, however. With the ease for selling and buying, overzealous traders can sell prematurely or buy at bad times.

Freedom: Online stock investors tend to have a lot of freedom to make their own decisions. This falls under control, somewhat, but the fact is this is one of the best options for someone who wants the freedom to make all of their own decisions regarding their money and investments.

Online stock investing can be a great way for anyone to get involved in the market. Coming with fees that are more affordable to the masses, this trend is one that’s more than likely to continue.

Online stock investing has opened up the world of investing to the simple investor. However, with that privilege comes the problem of new investors making mistakes that will cost them money. I personally think many new investors are actually gamblers rather than investors.

In my opinion, anyone who has a desire to trade stocks must absolutely read and learn as much as they can before ever putting one red cent into the stock market. As I browse the web and see some questions by new investors it is sad to know that they are in for a big wake up call. This because they think the stock market is an easy game to play.

The truth is that most new investors will lose money and lose it quickly if they try investing in individual stocks. I truly think new investors need to stick with simple index funds or exchange traded funds as their first venture into the stock market. Nothing will turn a person away from investing quicker than losing a lot of money right off the bat quickly. This will probably happen to most new investors if they invest in individual stocks.

Once you understand how stock prices move up and down then start small with a handful of shares. Nothing is more depressing then buying a large amount of shares in any one stock just to see that stock price go down 10 minutes after you place your buy order. This may sound simple enough, but I personally think the greed factor kicks in very quickly with new investors. New investors need to understand that stocks tend to fall in price much more quickly than they rise. So trust the golden rule of diversification because putting all your money into one or two stocks is going to catch up to you eventually.

While I personally have enjoyed my venture into online investing, I have also learned that it is not always a fair game for the small investor. The boys on Wall Street have a lot more control than anyone sitting in front of their computer at home. If you think you will beat them everyday you will be sadly disappointed. So keep it real when you first start investing and do not try to become rich overnight. Learning both the pros and cons of online investing will prepare you for the mentally challenging world of investing in stocks.