Online Investing

WAEF Internet workshop by Mr. Curt Minich
This Web page can be accessed at http://minich.com/interneteducation/investing

What you can gain by online investing Web sites:

Some Popular Discount Brokers

Etrade.com
schwab.com
fidelity.com
Ameritrade.com
americanexpress.com/trade
Morgan Stanley Dean Witter
Merrill Lynch
Salomon Smith Barney
PaineWebber
Brown & Co. ($5 trades)

Popularity
(by # of daily trades)

  1. Charles Schwab (2.2 million accounts, 93000 trades daily)
  2. TD Waterhouse (529,000 accounts, 42003 trades daily)
  3. E*Trade (676,000 accounts, 39990 trades daily)
  4. Datek (152,000 accounts, 33695 trades daily)
  5. Fidelity (2 million accounts, 33100 trades daily)
  6. Ameritrade (354,000 accounts, 25725 trades daily)
  7. DLJ Direct (529,000 accounts, 13366 trades daily)
  8. Morgan Stanley Dean Witter (112,000 accounts, 11531 trades daily
(up to 1.3 million trades per minute are being made!)

Some Reviews

Two sites that provide good reviews of online brokers are:

Gomez.com at http://gomez.com/channels/index.cfm?topcat_id=3

Donald Johnson at www.sonic.net/donaldj

Aspects of online brokers to look into:
  • stock trade commissions ($5-50)
  • broker-assisted commissions ($39 and up)
  • fast executions
  • customer service (phone, email, local branch)
  • free IRAs
  • real-time quotes
  • account minimum ($1000 - 15000)
  • sophisticated market research tools & charts
  • debit card included
  • number of mutual funds offered
A number of online brokers like Etrade, Schwab, & Fidelity allow you to open traditional checking & savings accounts with free unlimited online bill payment, free printed checks, reimbursed ATM/debit card use!
freetrade.com and freetradez.com allow you to make free market orders (at retail, not wholesale price) and limit orders for only $5

Keeping Track of your Investments

Use any one of these free, "unbiased", Web sites to use to track your existing portfolio or a "pretend" portfolio in case you want to practice investing first. You can also research financial & stock information, or simply learn the basics of investing!

Yahoo.com provides the use of MyYahoo to track your portfolio. Set up a free MyYahoo account at http://my.yahoo.com. You can easily set up basic stock screens at http://screen.yahoo.com/stocks.html to pick stocks according to criteria such as price per share, P/E ratio, industry, recent stock price performance, and estimated earnings growth. You can find practically any investment information you'd want at Yahoo's Finance Center ( http://finance.yahoo.com/?u ).

Fool.com is also known as The Motley Fool. The site provides basic and advanced investment advice. It provides daily, weekly email newsletters providing hot tips and research. They provide good IRA, 401k, and tax advice as well. Their "simple-to-understand" stock investment books have been best sellers for a number of years.

Quicken.com , the maker of the most popular personal finance/budget software, provides a wealth of information and the typical investment tools. I particularly like its Mutual Fund Finder at http://www.quicken.com/investments/mutualfunds/finder

Morningstar.com, the mutual fund authority, allows you to set up interactively analyze your portfolio of stocks & mutual funds to predict how volatile it is. You can click your portfolio's "x-ray" button to see how it is weighted in large & small companies, value vs. growth, industry percentages, comparison vs. S&P 500 Index, and more.

Bloomberg.com , the venerable market research firm provides vast amounts of detailed stock information.

SmartMoney.com is a companion Web site to the magazine of the same name (published by the Wall Street Journal). It offers many free tools and much advice. It also rates online brokers and allows you to set up a phantom portfolio.

CNBC.com is a companion Web site to the news channel CNBC. You can see tips on insider trading and set up a personalized ticker that streams across your computer window.

The Wall Street Research Net at wsrn.com provides typical investing tools and information.

Information

Online Stock Quotes - There are probably hundreds of sites that give time delayed stock quotes (usually 20 mins) and you can usually buy real-time quotes rather inexpensively. Chances are your online brokerage will give you real-time quotes if you make enough trades or have the necessary minimum.

Corporate Information - You can often find specific informatin about selected companies by visiting their Web sites (www.name-of-company.com ) and looking for a link to "Investor Information" or something like that.

Message Boards - Be careful of the what you believe in the message boards and stock market chat rooms that you find at many financial-related Web sites including Yahoo, Fool.com, etc. Scams have occurred where insiders post faulty information in order to effect the price of a stock.

Stock Trading Games - You can practice picking stocks at a number of online trading games. Play for fun before you invest your retirement funds! Or, you can join an online investment club.

Technical Analysis - See morningstar.com, wallstreetcity.com, flextrader.com, sixer.com, riskgrades.com, & traders.com for stock screens and other technical analysis.

You can practice making an online trade at DLJDirect and Firstrade.com (under "Account Manager" Demo).

Summary

Be cautious: You can see if an investment is registered by looking it up in te Securities and Exchange Commission's (SEC) database at www.sec.gov. All U.S. companies with over 500 investors & $10 million in assets must register. Also, you can see if a broker or firm is licensed by checking www.nasdr.com. Finally, never make an investment based solely on what you read in an online newsletter or on a message (aka bulletin) board.

If you want a lot of personalized financial advice, a personal relationship with a broker, a broadly diversified selection of investment products (bonds, real estate, etc.), and the satisfaction of knowing that you can visit your broker's office, knock on the door, and obtain customer service, online investing may not be for you.

Just as you do for other major investments such as a car or a house, you should perform background info before venturing into online investing. Taking this workshop is one step. You can also read books on online investing, visit the sites listed above, play the investment games, set up phantom portfolios, browse through the message boards, and research the companies that you are interested in.


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