At the age of 29, I began my journey as a self-directed investor, trading part time before and after work. Over the years I honed my skills and now trade full time. As I look back from where I began five years ago, I realise that being a "millennial" investor has its advantages. Here are three reasons why.
Trading All By Myself Means Saving Money
If you've grown up in the digital age, many of the skills necessary to trade for yourself are likely second nature. The comfort of working online provides the opportunity to not only take full advantage of online trading platforms -- you also benefit from reduced costs when placing a trade. One hundred shares of Apple
(NASDAQ:AAPL) can cut into profits by adding approximately 1% to a trade in broker's fees. Placing the same trade using a self-directed trading platform may cost as low as $1 in fees.
Trading platforms from big online brokerages and other sources offer institutional-grade capabilities that don't intimidate tech-savvy millennials, who can quickly learn to trade like pros.
Social Is the Hot Segment
One of the most important abilities for any trader to have is the ability to find good trades. As I look back at many of the trades I've placed, I realize I naturally focus on stocks of companies that I understand. The price of Facebook
(NASDAQ:FB) has tripled since its initial public offering in May 2012. After falling to $22 in 2012, it rallied to a high of $72 in 2014. Apple went up from $200 in 2009 to around $700 in 2012. These multibillion dollar-companies have emerged as big players that can influence the broad markets. Even Twitter
(NYSE:TWTR), which went public five months ago, has become a hot stock to trade.
As a younger investor myself, I'm comfortable trading companies that aren't traditional brick-and-mortar. Who better to understand the inner workings of a digital-age company than someone who's comfortable in that world? While some (but certainly not all) older investors are still trying to figure out what a #hashtag means, a younger generation of investors may have a built-in advantage.
More Research, Better Questions
My ability to ask questions has helped my trading most. Thanks to Google
(NASDAQ:GOOG) and the voluminous research available online, I have endless amounts of information at my fingertips. I'm comfortable looking for answers beyond what a traditional investment advisor might sell me.
Young investors -- or stock market investors of any age who have mastered online research -- can now gather their information from multiple sources, including social-media channels. Analysis reports can be obtained in a matter of seconds. Research can go beyond consulting professionals face-fo-face and include reaching out to the large network of expertise available online, another communication skill that millennials have acquired without effort.
Sarah Potter is the founder of SheCanTrade.com, an education and community portal for active investors of all experience levels. Sarah's book How You Can Trade Like a Pro is a straightforward guide to trading options, futures, and ETFs. Sarah's YouTube channel has a growing library of videos on trading strategies, market analysis, and live trading sessions.
No positions in stocks mentioned.