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How to Remain Secure in an Online Investing World


Two things are certain when it comes to how you handle investment transactions. First, the process continues to get easier and more convenient, now that you can do most things from your computer or even your phone. Second, no matter how many new technological advances are developed, there seems to be a comparable number of new methods used by hackers to hack your investment portfolio.

There is no guarantee that you can absolutely avoid hacking or identity theft, but if you handle your accounts responsibly, you may never need to experience it. Here are some tips that can help to protect you.

Start by Choosing Your Broker Wisely

When it comes to many things, from client support to security practices, all investment houses are not equal. You would naturally turn away from a broker with an unusable website and long on-hold times when you call to ask questions. Be sure to pay as much attention to security practices.

Some massive data hacks on well-known financial institutions have made the news, so you have to pay attention. Listen to these reports and avoid brokers who work in those financial institutions  — or to take action if you’re already a client. Even after these institutions resolve these issues, don’t rush to become the first person to hire them. Make sure they have a reputable reputation, and they follow guidelines before diving in.

Before signing up with an apparently-safe institution, make the effort to learn all you can about their protection methods. Do they encrypt data to ensure that hackers can’t use data that they acquire? When you log in, do they periodically require two-factor identification (typically requiring a password, followed by entering a code that they send to your phone)? They should also recognize when you log in from a device other than the one you normally use and ask you to confirm. Of course, many highly-advanced authentication methods, such as finger print identification or even iris scans, might be available, but they are less common.

Finally, get to know basic regulatory requirements. Since brokers are held to similar security standards that government regulators apply to the banking industry, you will be limited to postal mail or faxing when sending applications and other paperwork. If they permit you to send sensitive information via email, for example, it could be a sign that they are not following the rules that are there to protect you.

Stay Up-to-Date When Protecting Your Devices

Never expect a broker to take full responsibility for keeping your data and transactions safe. Since many threats come from your own devices, long before your data reaches your broker, you need to take responsibility for your security. You should install malware protection software on every device that you use; but this is not a set-it-and-forget-it proposition. As a matter of fact, it is good advice to update the software as soon as you install it.

You also need to recognize that new malware threats are developed with lightning-like speed. In 2018 alone, a whopping 10.52 billion malware threats were detected. Take the time to apply definition updates every day. Then, scan all of your devices at least weekly to ensure that no threats managed to get through.

Finally, you might want to consider signing up with a reputable identity theft protection company. This protection can cost $200 or significantly more per year, however. If you are willing to put in some time and effort, you can do it yourself. Just make sure that you learn to do it thoroughly.

Monitor Your Accounts Regularly

You’ve probably heard the warning that you should avoid paying excessive attention to investments, which can be adversely affected by loss aversion. This is the concept that investors who watch their balances too closely are more likely to respond irrationally to losses than they might respond to gains.

Still, from a security standpoint, you should never ignore the monthly statements that you receive from your broker. In fact, it’s probably a good idea to review balances and transactions more frequently. Make sure that you can identify a justifiable reason behind any unexpected investment balance changes. Check all cash accounts, such as money markets, to ensure that they contain all the money that should be there. Review all transactions to confirm that you recognize all of them.

If you notice anything that seems incorrect, call the institution immediately to discuss it. If your assumptions are incorrect, you’ll sleep better when you have an explanation. If a security breach seems apparent, the representative can guide you through the steps that you need to do next.

Use Secure Passwords

Observe the basic rules of choosing secure passwords. Of course, in addition to being long, complex, and difficult to remember, your security can rely on using a different password for every account that you access from your device.

Consider signing up for a password manager. In essence, these services issue unique, very secure passwords for every possible account that requires them. You only have to remember one password; the manager remembers the rest. You can obtain some password managers for free if you have only one device to protect. However, the annual cost of paid versions is very affordable.

Never Take Security for Granted

If you’re an investor, then you’ve probably heard many times that “past performance is no guarantee of future results.” While that saying pertains to the predictability of investment results, it can apply to security risks as well.

Hopefully, your private information and identity have never been hacked, but never say “never.” Security breaches can even affect massive financial firms, which are popular hacker targets. If you continue to keep on top of security risks and trends — and take all action necessary to protect your investments — you can reduce the risk significantly. The right security protection choices and actions are just as important as your buy and sell activities while you pursue your personal investment journey.

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