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"The cutting-edge technology has fundamentally changed the way we manage
and invest our money"
The rapid pace of change and development in the technology has been startling.
The internet, something which was unheard of a few years ago, has started to affect
everyone's life. In the office kitchen, coffee shop, on the golf course, etc, everyone
from all walks of life, is talking about the internet.
From a financial perspective, computers and the internet have opened the door to
financial information and online investing. Even college students are fascinated
with some of the stockmarket trading games found on the internet. America Online
alone maintains more than six million on-line portfolios and deliver more than 60
million stock quotes daily.
The most promising feature of the internet is the way investors can access and manage
information - one of the keys to successful investment. The transmission of information
has become so efficient that expensive financial resources and trading facilities
which previously was accessible only to brokers, fund managers or high networth individuals
can now be made available to individual investors at relatively low cost.
Online investing can save banks and investment houses huge amounts of money in overhead
costs. Growing number of financial institutions are now providing online support
services to their customers - some have even come up with their own banking and investment
websites.
In the more advanced countries, it is possible to both manage your financial resources
and invest electronically. Individual investors are able to download information
easily into their personal portfolio program, made available by the fund managers
or bankers.
More and more people are beginning to realize the importance of learning to protect
themselves and investing for their future. In the past, they had to refer to their
brokers for information or read up outdated information from the papers. Now they
can turn to the internet for the latest financial information on the stocks they
are interested in.
Some websites are even interactive in that it allows active communication between
the investor and the computer. For investors, online trading is fast, convenient
and economical. "More importantly, I can actually see the status of my trades
instead of having my broker tell me over the phone", said one online investor.
Mayumi and Don are the new breed of investors in the U.S. seeking convenience,
control, and cost-savings by investing through the internet. A year ago, Mayumi got
stuck when the broker who had been servicing her for the past five years left and
no one followed up her account.
That was when she decided to open an account with an online broker offering online
stock trading facility for private investors. "I have always been into computers
and playing with the internet is nothing new to me" she said.
Her knowledge in stocks coupled with some help from her friends made it easy for
her to trade on her own account through the internet. "No more screaming at
my stock broker" she continued. Ever since she decided to trade electronically,
she has used three different brokers, switching to whoever can offer lower prices,
greater convenience or extra services.
Don, a chartered accountant is convinced that trading through an electronic broker
promotes flexibility especially in terms of cost. "To me, cost is an important
determinant in my investment decision" he explained. He trades very frequently
and paying a flat or low commission is critical.
Every morning before the sun rises, he will hook on the computer to check his account
balance. "During trading hours, I can update stocks with just a "click".
"I track the gains or loss in each of the stock every 15 minutes when the market
is running hot" he explained. "It is quite fun acting as your own fund
manager being totally in control of your own money although it is a very hectic job".
For some stock investors, investing online may be more than just a click. Although
investors are more likely get through to a computer than a traditional broker, experience
shows that things may not be as smooth as it appears especially during days when
calls swell to more than double the normal volumes.
Timely information and personal monitoring are the main reasons why smaller investors
are flocking into cyberspace investing. Be aware though that monitoring the trades
closely takes a lot of time. Sitting face-to-face with the monitor may not be easy
for some. Another road block is security. Investors worry that somebody - a hacker,
could interrupt in their trades, change the transaction amount or tap your funds.
While there is no guarantee that this will not happen, online brokers are constantly
working to improve security.
Some argue that invasion of privacy could also occur through a traditional broker
where account statements may be photocopied or manipulated. "Even the phone
calls can be tapped if the bandits want to" laughed Don. "The cutting-edge
secure technology will make life very difficult for the hackers" he said. On
the other hand, banks have enormous credibility attached to their online products
and justifiably they want to protect it too.
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