A lot has changed in the world over the past half-century, and that includes how we invest.
One innovation in particular stands out as having the biggest impact on the way we try to grow our wealth, according to a recent Charles Schwab survey.
Schwab asked about 3,000 of the firm’s clients to name what they consider to be “the most important change in investing during the last 50 years.”
Nearly two-thirds — 61% — had the same answer: the advent of online trading.
Just as the internet has revolutionized many other areas of our lives, online trading has made it much easier for anyone to dip into and out of individual stocks quickly.
Online trading also has been a boon to those who simply want to buy stocks, mutual funds or exchange-traded funds (ETFs) week after week with the plan to hold them for years or even decades.
In fact, it is much more likely that investors are using online trading to “buy and hold” than to rapidly buy and sell stocks in hopes of making a quick killing.
The Schwab survey found that 86% of investors describe themselves as more like a tortoise — deliberate and steady — than like an aggressive and scrappy hare. Just 14% of respondents put themselves in that latter category.
In addition, Schwab asked the investors who participated in the survey what they would do if they suddenly received $100,000 to invest. An overwhelming 87% would try to limit risk by focusing on long-term investing.
Just 13% would use the cash to take bigger risks on short-term investments.
If you are ready to wade into the world of markets, check out “9 Tips for Sane and Successful Stock Investing.”
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