If you’re currently assessing the pros and cons of online investing courses, this article is designed to help. We’ve assembled three of the benefits of online investing courses, which you should consider when deciding on what path to take in your investment education.
Investing courses can vary widely in quality, length and also price. Free courses are available from a huge number of platforms, but there are also premium courses (costing upwards of $40) which can also deliver a great introduction to investing at an affordable price.
The points in the following article will apply to all good quality courses, regardless of whether they are free or paid experiences.
Mechanical knowledge – how it all works
The most basic need a good investment course will need to satisfy, is to explain how the nuts and bolts of the stock market works. Topics in here should include:
The history of the stock market, including historic returns.
Who participates in the stock market
- Financial Institutions
What is a stock and how do investors realise a profit from investing
- Capital appreciation
An introduction to collective investment schemes (funds)
- How to funds work
- Buying units in funds versus individual stocks
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An introduction to economics and understanding company financial performance
This mechanical knowledge will help you to not only act as an informed market participant, but it will also help you understand ‘what comes next’. Only by learning about the incentives of each market participant, and how transactions are physically made possible, will you be able to predict the consequences of events such as the stock exchange halting the trade of a particular stock, for example.
Risks and rewards – how to balance a portfolio
You may understand what a stock is, but this will not help you mirror the successful investment portfolios of professionals.
Stocks are like raw ingredients, and the investment portfolio is like the final fish.
The second benefit of online investing courses is that they could help you understand how other people blend together assets with different risks and rewards, to create a cohesive portfolio which generates as consistent a return as possible.
You’ll find plenty of ‘model portfolios’, which are illustrative examples of how different investors divide their money across different asset classes, to gain exposures to different risks and investments with different characteristics.
How to spot investment scams
By taking an online investment course, you could be educated in the warning signs which indicate that an investment is actually a scam. There are over 50+ indicators that an investment opportunity is not real.
If you can only think of 5 – 10 on the spot, then it’s clear that you would see a benefit to expanding your mental checklist for scam red flags.
This will reduce the chances of your first foray into investing becoming an early disaster which could put you off for the rest of your life.
Some examples of red flags may be:
- The investment scheme is promoted or provided by a company which is not registered with the FCA (applies to the UK).
- The website hosting the investment scheme has a low ‘Domain Authority’ score, per third party provider Moz.com
- The visible web traffic of the investment opportunity is extremely low
- The sales person or directors of the investment opportunity seem willing to invest too much time into securing your small investment.
- You can find very limited editorial content about the investment online which offers a balanced or negative view.
As I mentioned above, the full list of red flags is in excess of 50, therefore this is only a taster.
In summary, any good quality introduction to the investing course will provide an overview of the above. This will both give you insights into how this all works, knowledge to help you make investment decisions, and the list of red flags you need to be aware of when searching through investment opportunities.