Electronic Investing Part I: A New Investing Environment

One of the most powerful but underrated developments on the Internet during the past year has been the advent of electronic discount security brokering.

Pioneering discount brokers like Charles Schwab enabled individual investors to control their own portfolios and make investments for low fixed fees instead of the customary high broker commissions. The sacrifice for the investors was that they didn't get the "benefit" of a professional broker's advice and access to the kind of up-to-the-minute information that a brokerage house could afford.

While discount brokering was a great boon in principal, it left a great deal to be desired in practice. Before the Internet began making stock quotes and other important investment information freely available, an individual was hard put to make a real killing in the market. Those in the know still held all the really good cards--the ones that would enable them to "time the market" and make significant short-term gains.

During the past year the emergence of a multitude of investor communities and information resources along with many Internet discount brokerage services has suddenly shifted the balance of power to the agressive small investor. Now an individual can open a trading account for as little as $1,000 and begin buying and selling stock, mutual funds, and options. Fees per trade run as low at $12.

Most importantly, the amount of timely information available for free is well beyond the ability of any expert to absorb and interpret. Now, at last, anyone with a few thousand dollars and an interest in the financial markets can become an professional investor and perform as well or better than the manager of a high-profile mutual fund.

The following table lists a few of the electronic brokerage services:

Firm	Minimum Investment	Cost per trade
eBroker	$10,000	$12.00
E*Trade	$1,000 nonmargin $2,000 margin	$14.95
Ceres Securities	$5,000	$18.00
Wyse Securities	$2,000	$19.95
E-Schwab	$5,000	$29.95
Aufhauser & Co.	Enough to make your first trade. If your initial account balance is under $10,000, add a one-time charge of $20.	1-399: $24.99 400-1700: $34.00 1700 and more: $.02 per share
Accutrade, Inc	$5,000	$28 + $.02/share
Howe Barnes Investments, Inc.	$5,000	$29.00 + $.025 per share on first 3,000 shares; $.015 per share thereafter.
Net Investor from PAWWS Financial Network	$5,000	$29.00 + $.025 per share on first 3,000 shares; $.015 per share thereafter
Investex Securities Group	$5,000 for margin account, nonmargin just enough for first purchase	1-500 shares: $30 per trade 501-1650 shares: $33 per trade Over 1650 shares: $.02 per share
Fidelity Investments Brokerage Services	$20,000	begins at $ 29.50 + 1.7% of principal; minimum $45.00

Quotes

Quotes can be obtained from a variety of sources, some with an acknowledged 15-minute delay and some supposedly in real time. It takes about 15 minutes for transactions be to posted to the Internet in the best circumstances, so even "real-time" quotes are somewhat delayed.

Among the best sources for quotes are the brokerage firms themselves. E-Schwab offers "real-time" quotes to its account holders.

Quote.com offers free 15-minute delayed quotes to anyone and lets you create a "portfolio"--a personalized list of stock or funds that can be quickly checked at any time. It also offers charts, news, and research.

Stockmaster offers free 15-minute delayed quotes and graphs of each stock's performance during the past year.

Some Online Publications

Some good investor-related online publications include the following:

Silicon Investor lets registered users participate in discussion groups about nearly every technology stock that can be purchased. It also offers delayed quotes, investment suggestions, and feature articles from the financial press. I found this site especially valuable as a source of archived discussions of a company's performance. You can read what people were saying last year, as well as what they're saying today--wild investor enthusiasm can look sadly pathetic from the other side of a long stagnation or precipitious fall. This is a surprising good source of information that would usually only be privvy to insiders, and there are always people lurking who have read all the latest press about the company in question.

TechWeb's TechInvestor from CMP publications is another excellent resource for technology stock investors with lots of original reporting and commentary.

The Pitbull Investor contains quotes and a lot of information about a variety of financial topics, especially Options trading.

Briefing.com from Charter Media, Inc. offers timely news briefs about company earnings and such things as takeover rumors. Also featured are analysis and ratings of a large number of stocks.

The Edgar database of the Securities and Exchange Commission offers online access to all the required SEC filings that include earnings reports and IPO prospectuses. A valuable companion to Edgar is Smart Edgar, a commercial service that provides instant access to the most recent filings for a fee of $29.95 per month: "The premiere real-time site for SEC information." It invites subscribers with the lure "Just One Golden Nugget of Information that leads to a successful decision pays for your Smart Edgar subscription many times over!"

internet.com's own Internet Daily Stock Report offers detailed information and commentary about the performance of Internet stocks, including an index based on 25 well-known Internet companies. It offers quotes on all of them. Steve Harmon, Sr. Internet Investment Analyst for internet.com, writes a Morning Report and a Market Close Briefing focusing on Internet stocks.

Next week, we take a look at an Internet investment strategy.

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