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’. The same goes for individual investors. In the past, if an individual wanted to buy and sell on the stock market, the fees involved could become exhorbitant. 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. That can turn a 10% return into just 6% – even less depending on your management fees. The issue becomes worse when you consider the constriction of profits caused by the recession. The truth is, many investors today finding it increasingly hard to maintain their profit margins using traditional channels of accessing the stock market.

However things are changing. As the digital age matures, weve got access to instant real time information, high speed internet and sophisticated trading software. Which means you can trim the fat off the deal and cut out the middleman. Online share dealing services allow you to manage your own portfolio at minimal cost.

An added benefit is that when you switch to online trading you can take a long term view of your investments. It’s a far smarter approach than only looking at the short term quick wins.

A consequence of the lack of predictability of the markets in the current financial climate, means that trading techniques such as financial spread betting are also on the rise. Spread betting doesn’t actually involve buying shares at all – you merely predict their rise, or fall, in price. It can be risky, but if you know what youre doing it can yield excellent returns. A variant of financial spread betting is CFD trading, or Contracts for Difference. The name is self explanatory when you think about it: they are agreements directly between two people on what the change in price of a share will be between two dates – the loser pays out to the winner. The fact that these methods allow you to profit from drops in share prices as well as rises, make these very interesting to investors during the recession. Another reason for the recent meteoric rise in popularity of these methods is the sheer simplicity of getting started online.

So what is the conclusion to all this? Exactly like businesses and corporations, individual investors need to be thinking about cutting their costs, improving efficiency and looking for new opportunities. If you want to stay profitable and survive while others fall by the wayside, switching to online investing is probably the strongest weapon in your armoury.