Hence, in conclusion, there are both risks and rewards attached with the process of online stock investment. The retail investor, who is usually investing his hard-earned savings, is indeed very vulnerable. He/she should look at various information sources with a degree of skepticism, as frauds and scams are commonplace in the Internet. Even the most authoritative looking source of information, say a popular business station, can perpetrate misinformation in order to manipulate people’s decision making process. Hence, the investor should verify if a particular investment company has cleared the requirements imposed by the Financial Services Authority. Online investors should also be wary of ‘pump and dump’ operations, where “a crook hypes the thinly traded stock of a tiny company, hoping that eager investors will run up the price. When the price jumps, as can happen quickly when word of a “hot” stock circulates on the Internet, a sell-off by the perpetrators can cause it to drop back down just as fast” (Koreto, 2004). But for those investors who are willing to guard themselves against such manipulation and who are prepared to do studious research, online investment is indeed a viable method of creating wealth. Those individuals who show dedication and discipline and who abstain from get-rich-quick temptations do indeed go on to make impressive returns on their investments.
References
Ena, M. (2008). Securing Online Transactions: Crime Prevention Is the Key. Fordham Urban Law Journal, 35(1), 147+.
Garmhausen, S. (2008, February). Are You Ready to Do It Yourself? Discipline and Self-Study Can Help You Profit from Online Trading. Black Enterprise, 38, 35+.
Holter, J. T. (2001, June). Online Aspirin for Online Traders. Futures, 30, 59.
Koreto, R. J. (2004). The Best Online Investment Sites. Journal of Accountancy, 185(1), 41+.
Murray, D. (2000, April 10). Online Investment Scams: Coming to a Screen near You. Medical Economics, 77, 184+.