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Many people are now dabbling in online share trading as a way to lower their commission fees and experiment with the stock market. While this can prove financially rewarding those with little experience in the stock market could find this a risky strategy. Some financial gurus are recommending a safer option of managed funds for those with little experience in the stock market. It is important to do background research into the difference between managed funds and direct share investing and work out what is the best investment for you.

Direct investment through online brokerage websites is often the simplest way to access the stock market from the comfort of your own home, but it does come at a price: those looking to make a substantial return on investment will need a large amount of money to start. You will also need knowledge of financial markets and do background research into stock markets trends. While some people may thrive on the independence that online share trading offers, it's very easy to lose money, as you're competing with professionals who have worked in the stock market for several years. Many at home day traders may find that the amount of research needed into share trends and smart investments will offset any financial gain made. But like all things that are risky, the pay-off from making smart investments can be worth it.

Another viable option for stock market beginners is through managed funds, which allows you to combine money with other investors, and let experts make investments on your behalf. Managed funds often are a more popular choice for stock market beginners, as you can still choose what investments you'd like to make, but under the guidance of an experienced professional. Options such as managed funds can broaden your investment opportunities. Using these investment methods can open doors, such as investing in commercial property which most individual investors would not have the opportunity or funds to be able to do. Without being willing to take risk, there will be little return; you're much less likely to reap as many financial rewards as you would have through direct investing. Additionally, management fees can be expensive, which is a turnoff for clients who only want to make a minor profit. But for those who are novices in the stock market, it's often a better choice to learn from an experienced day trader, as opposed to going it alone.

It is important to work out what is the right investment option for you, and this will come down to what expectations you have. If you're an experienced day trader, or have a good handle on stock market trends and want to avoid paying major management fees, online share trading might be a better option for you, as you'll be able to make smarter choices than a novice trader. However, if you're a bit of a novice in the stock market, and you're looking for guidance with your investments, a managed fund, headed by professional day traders, would be a smarter choice as opposed to going it alone.

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Lynelda & Richard Greenwood co-founder the Click 4 Group to help consumers make informed financial decisions. Websites including compareyourbank.com.au help consumers to compare bank accounts and make investment choices such as share trading online.

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