Technology has transformed almost every aspect of our lives, and investing is no exception. If you’re new to investing, or even if you’re an experienced investor considering transitioning to online investing, it’s important to be aware of both the benefits and potential risks associated with digital transactions. In this article, Satrix, South Africa’s leading provider of index-tracking investment products and exchange-traded funds (ETFs), outlines some of the ways to stay safe and savvy throughout your online investment journey.
Firstly, What Is Online Investing?
Online investing is actually no different to traditional methods of investing, and the same rules apply. In other words, you need to know your goals, i.e. are you investing for the long term / retirement, or are you investing for a medium-term goal – perhaps a new car or an overseas trip? Your risk appetite and tolerance are equally important as this will determine the funds you select for your portfolio. And of course, an annual review of your investment portfolio is non-negotiable. You would only need to make changes to your portfolio if your personal circumstances change, but an annual review helps ensure that you stay on track to meet your goals, and highlights where improvements can be made.
Once you have an understanding of your goals and why you’re investing, you simply need to select your platform of choice and can begin investing.
Benefits and Risks of Online Investing
The main advantage is accessibility. You can invest online from the comfort of your own home, or from wherever you are, at any time. Most online platforms offer educational articles and resources, helping you learn not only about their platform, but about investing and investments in general.
Online investing also typically comes with lower costs than traditional forms of investing. Also, you can start your investment with smaller amounts too. For example, Satrix lets you start investing with as little as R100 on the SatrixNOW platform. The combination of starting to invest smaller amounts earlier in your working career, together with lower costs, means that your investment has a longer time to grow – letting compounding work its magic over the years.
Online investing, however, is not without risks. As online activity in general has increased over the year, the prevalence of scams and fraudulent schemes has increased along with it, as fraudsters spot opportunities to take advantage of unsuspecting investors in the digital space. Again, as mentioned previously, online investing is not that different from traditional investing and the same rules apply. Therefore, if it sounds too good to be true, it probably is. If an investment opportunity is promising high returns (especially in a difficult market environment) or if you’re being pressured to make a decision quickly, take a step back and evaluate before investing. Ask an appropriately qualified financial adviser for advice or make sure that the investment house is listed with the Financial Sector Conduct Authority (FSCA). An online Google search may also highlight any potential negative reviews the company may have had.
Be Particularly Vigilant on Social Media Channels
In 2024 the Association for Savings and Investment South Africa (ASISA) has also warned that investment companies have seen increased investment fraud via social media channels. Fraudsters have even taken to imitating key personnel by using their profile photos and company logos. You can read more about how to protect your digital footprint here.
Investors are increasingly using social media channels to obtain investment knowledge and advice. Be sure you’re following a reputable company or investment adviser. While “finfluencers” are all the rage right now, many are not qualified to provide investment advice. Use the information to spot trends and to keep pace with what others are doing, but always ensure that your investment actions match your plan and obtain the necessary advice.
The following are Satrix’s official social media accounts. If the URL in your web browser reflects another address, do not proceed with any transactions on that page.
Facebook (Satrix)
LinkedIn (Satrix)
Instagram (@satrix_sa)
Twitter (@SATRIX_SA)
YouTube (@Satrix_SA)
SoundCloud (Satrix)
Getting Started
Now that you’ve established your investment goal, your risk appetite and tolerance, how much you have available to invest, and that your chosen platform is safe, you’re ready to begin investing.
Satrix makes investing simple and cost-effective. You can set up your SatrixNOW account in five short steps. The Satrix Access Range is a good place to start if you’re new to investing. It offers diversified access to the market and the range includes four of our flagship funds, catering to a range of investment horizons and risk appetites with both local and global exposure.
It’s important to remember that the SatrixNOW platform is a DIY, or do-it-yourself, platform. This means you invest your money – Satrix doesn’t do it for you. Satrix will never phone, SMS or WhatsApp you about an investment, or request any of your personal details via phone.
Protecting Your Personal Information
The following are just some general guidelines to protect your personal information when transacting online, no matter the platform:
Strong Passwords are non-negotiable. Use at least 10 characters, comprising a combination of upper and lowercase letters and special characters such as & or @. Use different passwords for different investment websites.
Two-Factor Authentication is recommended as it offers additional protection. A thief would need to have both of your devices (cell phone and laptop) to access your account.
Anti-virussoftware should be updated regularly and installed on all devices.
Never use public Wi-Fi to perform financial transactions.
Conclusion
Investing online is accessible, cost-effective and allows you to have control over your investments and let’s you learn about investing too. But be sure you’re investing with a reputable platform and remain vigilant at all times.
Visit https://satrix.co.za/fraudawareness for more information.
Disclaimer
Satrix Investments (Pty) Ltd is an approved FSP in terms of the Financial Advisory and Intermediary Services Act (FAIS). The information does not constitute advice as contemplated in FAIS. Use or rely on this information at your own risk. Consult your Financial Adviser before making an investment decision.
Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities and an authorised financial services provider in terms of the FAIS.
While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSPs, their shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information.