People used to get a lot more professional advice from their stock brokers than they do now. Before discount brokers became the best way to buy and sell stocks, everyone had a stock broker that they had to call in orders to. For many investors, those same brokers where the ones giving advice on how to play the market at any particular time and suggesting what might be the top stocks to buy right now.
Before online trading, you had to open an account in person. At that time you would be asked about your investing goals and other questions designed to determine what type of investing was right for you. Some people want to be very aggressive while others want safer stocks that are more likely to protect their assets. You might have even developed a relationship with your broker over the years but at the very least, you weren’t totally out by yourself such as you are now in the land of the Internet brokerage houses.
Most people now that are learning how to buy stocks online don’t have a clue about the way it used to be. They set up their account online and begin buying and selling stocks just like they place bets at an online Casino. It’s all so automated and impersonal that you simply marvel at how the technology comes together.
Just learning how to place buys and sells means that a lot of fundamental investing knowledge may not be being taught as it should. As an example, do folks know that the older you are the wiser it is to have less of your net worth invested in stocks? The one factor young investors have to fall back on is a lot of time. They can overcome big and small dips in the market because they have time to wait them out. If their shares go down or there’s a protracted bear market, they have time to get it all back because they have many years of life left.
It is older investors who have a lot much less time that find themselves in big trouble if they have too much of their money in stocks and the market goes down as it did in 2007 and 2008. During that 2 year bear market, many older individuals had all of their life’s financial savings in the stock market and they lost much of it. Many of those folks that wanted to retire are now finding that they have to continue working due to the cash they lost.
Buying stocks on-line is an inexpensive and environmentally friendly solution to making trades but many investors won’t be getting the information they need. If these older individuals who lost so much money had had a financial advisor, it might have turned out that more of them would have had less invested in the market when it started to go south and more of them would have been a lot better off than they are today.
