Historically, recessions have always been a period when the least efficient parts of the economic system are pruned. It’s the old Darwinian concept of ‘only the strongest survive’. And it’s not only companies but individuals to whom this applies. The old school way of doing things, going through traditional stock broker, often means you end up paying pretty high fees. Its not uncommon to pay a 2% annual fee and a whopping 20% of your profits on your investment straight to fund managers and stockbrokers. Suddenly that profit can look a lot less, a far less attractive proposition, especially when you add fees to that. This is magnified by the fact that the stock market collapses of late have reduced the levels of profit being made by investors. It’s a simple fact that it has become more difficult to turn a healthy profit from dealing with traditional stockbrokers than it used to be.

This situation, however, is evolving. In today’s broadband age, more and more of us have got high speed connections and access to real-time market information as well as some pretty clever trading platforms. Essentially this means cutting out the middle man and recovering some of those lost profits for yourself. Online share dealing websites mean you can take control of your investment porfolio for very little cost.

Taking a long term, strategic perspective on your investment decisions is also something that becomes easier and more manageable with online trading. It’s a far smarter approach than only looking at the short term quick wins.

Alongside the rise in the use of online stock brokers, the volatile markets are also leading to a huge rise in financial spread betting. This involves betting on a rise or fall in share prices and doesnt involve stock purchase at all. It can be risky, but if you know what youre doing it can yield excellent returns. A variant of financial spreadbetting is CFDs, or Contracts for Difference. These involve an agreement between two parties to pay out on the difference between an opening and closing share price. Spread betting and CFDs are both attractive alternatives to actually purchasing and selling shares amongst investors, particularly as you can profit from falling prices just as much as rising ones. They are both also really simple to get into online, which has also lead to the increasing usage of online CFD trading and spread betting of late.

The moral of the story? Just as the biggest companies and conglomerates are having to shape up, reduce costs and prove their versatility during the economic downturn, so must the individual investor. For the individual investor looking to remain profitable while others collapse under the recession strain, it might be time to switch to trading online.