Dale Jackson

Personal Finance Columnist, Payback Time

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Henry Kravis, co-founder of private equity giant KKR, is urging “amateur” investors to step aside in the wake of the Brexit fallout.

He ought to know the risks of investing in this market. Shares of KKR are down nearly 43 per cent over the past year.

That gives bragging rights to amateur investors with gains over the past year – and even those who have lost less than 43 per cent.

Take that, KKR.

Some retail investors need that sort of warning but many are acutely aware that the stakes are much higher for those who invest their own money. If Kravis has a bad year he’s still really, really rich. If we have a bad year we may have to alter our retirement plans.    

For better or worse, we live in an age where the average investor has access to many of the tools that were once exclusively for big institutional investors.

Here are a few:

• Educational tools: Access to up-to-the-second market news and expert views are a click away thanks to the proliferation of financial news sources. We can research, emulate and evaluate the big boys.

For more fundamental financial information the Ontario Securities Commission has a wealth of objective financial and market explainers.

Most online brokerages also offer free tutorials on how to get the most out of their trading platforms.

• Set it and forget it: Those same online brokerages also offer features such as real time alerts, which notify you immediately when news breaks or trading patterns shift for a specific stock. They also offer real-time trading to act on that information as quickly as most institutional investors.

Risk management is as easy thanks to the ability to set conditional orders. Stop losses, or moving stop losses, can be set to limit losses or lock in gains. Buy orders can also be set if a stock you like falls to the price you like.  

• Exchange-traded funds: ETFs are possibly the greatest leveler for the average investor. They trade on major exchanges just like stocks, and provide access to a world of diversified stock indices that are simple to track. They also come at a low price so more of your investment continues to be invested.