Digital banking has introduced innovative ways to manage your investment portfolio, and online share trading (OST) is a popular addition. You can buy and sell shares from your computer or smartphone and update your investments in real time. If you're a young adult committed to a long-term plan to build your wealth, your digital device lets you add OST to your investment portfolio and manage your trades conveniently, 24/7.

However, don't let the convenience of OST blind you to the risks of trading on any stock exchange – share prices rise and fall, so it's easy to lose more than you make if you don't know how to predict market movements. Make sure you understand stock markets and how the different financial instruments they offer work.

Benefits of managing your own portfolio

That said, it's worth exploring OST if you want more direct control over your individual investments in specific companies and industries. You might also find that OST helps you make your investment growth respond more agilely to stock market movements – but before you 'play the market', you need to be confident that you have enough knowledge and experience of your own.

With sufficient expertise on your side, you can use OST to buy your choice of shares. They may help your investments grow faster than they would if you invested in the markets using a shared-risk product like a unit trust, where expert fund managers invest pooled contributions in a variety of stock market instruments on behalf of investors.

How OST differs from traditional investing

When you buy shares online, you want the value to rise so that you can make a profit when you sell – or you might sell shares that you think are about to drop in value, then buy back a greater number of shares when their value starts to rise again. So, OST is identical to investing in its goal of growing your wealth by buying low and selling high.

But when you invest in managed investment products – say, a unit trust – the trust's experts invest all the members' contributions in stocks and shares that fit the fund's risk appetite and best-practice guidelines. You can't control how that money is invested, even if stock market conditions change overnight. In contrast, OST allows you to respond digitally in real time and adjust your investments in different stocks and other financial instruments.

How to build a balanced investment portfolio

You can use OST as part of a long-term investment strategy, if you take the same approach to the stock market as the fund manager of a unit trust would. Construct your OST portfolio with a variety of financial instruments that balance high, medium and low levels of risk, and you won't have to spend all day watching the stock market like a hawk. You'll simply need to review your portfolio once a month to check that growth is steady, and if it isn't, adjust your OST position accordingly.

However, OST also gives you the option of buying and selling shares more often, making decisions according to the data that your OST platform updates continually. By tracking shares in real time, you can buy and sell stocks every minute – although trading this aggressively takes experience, knowledge, confidence and, often, significant amounts of capital.

If the pace of day trading puts you off, you can make solid OST investments using hourly or daily updates, then buying or selling as needed when the market shifts. The bottom line is that OST can deliver decent investment returns, if you learn how to predict the market and protect your holdings from major risks.

Is online share trading right for you?

Before you decide to invest in OST, ask yourself if you have the following characteristics:

•  An appetite for risk.
• The time and money to learn everything you need to know about stock markets, how they work, and which financial instruments they offer.
• The dedication to stay focused on market movements all the time.
• The will (and the financial reserves) to make up losses when you guess wrong – you never predict the rise or fall of share prices with perfect accuracy.

If you're willing to invest the time and money needed to learn about OST, and it suits your personal circumstances and financial goals, it can be a useful addition to your investment portfolio and overall wealth-building strategy.

Explore OST on the Nedbank platform

Find the Nedbank OST platform on Online Banking or the Money app. Simply getting involved makes it easier to learn, and the easy-to-use dashboards help you grasp the basics quickly. Create an account using your Nedbank ID, and once you've been verified, you’re all set.

But don't just dive in making random trades. First, learn how the various financial instruments work – it's essential that you develop a solid understanding of this baseline knowledge. Nedbank experts suggest that you consider any OST investments within the framework of a 5-year plan. You can choose to trade in only 1 company or focus on a single commodity – but remember that OST also makes it easy to spread your investments over different risk categories.

Extra benefits for young adults

Our OST platform can help you balance risk and teach you how to read the stock price charts and trend reports authored by stock market experts. Get insights from Nedbank OST experts that will help you make better-informed buying and selling decisions.

The platform also offers free online training modules on share trading for beginners, and you can sign up for real-time alerts and updates on stock movements, or company news and information from reputable sources like Reuters and Nedbank.

If you're between 18 and 25, there are even more benefits:

• You pay zero monthly fees.
• You pay a flat brokerage rate of 0.25%, with no minimum charge per deal and no administration fees (a saving of 64% on the standard brokerage rate).
• You can invest and trade in all listed instruments on the JSE, including ETFs.

And if you're serious about building your wealth as a young adult, you should also explore offshore investing.

For more information about Nedbank OST, send an email to nedbankonlinetrading@nedbank.co.za. If you're ready to start OST, you can register now. Follow the prompts on the platform to get in touch with an OST expert if you need help.