The Globe and Mail

It's easy to open an online account. It's a little more difficult to know whether you should open one in the first place and how you should act once you're making investments from your living room.

Tom Collimore, the director of investor education at the CFA Institute, an organization for financial analysts, says before hitting the "open new account" button there are a host of questions investors need to ask themselves. Here are his answers to five of the most important.

1. What are some of the things to look for if you're considering opening an account?

There is a bit of a temptation to treat an online account as a way to just save money, and that shouldn't be the goal. It's also not a game, even though it's online.

And it's very important that you understand your own skill sets - you may know a lot about equities, but if that's all you're investing in then it's possible that you are selling yourself short.

There are other things you need to understand if you are going to diversify - it's quite reasonable to think that you'll want to look at fixed-income as well as equities, you may want to look at commodities and cash. And it's likely you're not an expert in all of those areas, so it may not be prudent to think you can do it all alone.

Just because you're online doesn't mean you can't ask for professional help, it doesn't mean you can't consult others.

2. How much of a commitment is an online account?

You need to be very, very, very watchful - managing your money is a real job. You can't just put your money into a bunch of equities and come back a quarter later and expect to understand what has happened. It's a time commitment, and that's fine if you're willing to sit down and review things fairly regularly.

If you're pressed for time, maybe it's not such a great idea.

3. How is investing with an online account different than investing with an adviser?

When you have a professional helping you, you are able to talk about things that you may want to consider before making a decision.