On-line trading has become
commonplace in the past few years. All the major brokerages now offer on-line
accounts. Commissions run from $7 to $30. Much more if you call to have
a broker make the trade for you. I know of two brokers that have offices
here in San Antonio. They make it easy to open accounts. I have a CharlesSchwab
account and have had no bad experiences. There have been three or four
extremely high volume days in the past year when investors could not log
on to trade and brokers did not answer the phone. Computer crashes have
caused a few brokers to be down for hours.
There is a new breed of on-line brokers that specialize in trading on
the Internet. They have no offices to walk in to. They advertise on TV’s
financial programs and in financial newspapers.
This article is not about day trading. That is quite different from
on-line trading. People that do that often buy and sell a stock in a matter
of minutes. From personal knowledge, I can tell you that nine out of ten
day traders lose money. My accountant will verify that! Sic
Using the Internet for research is easy. In fact, there is almost too much information out there. A lot of web sights are free. Here is a current list, collected from members of our financial SIGs (Special
and in no particular order.
List of web sights for information:
With an on-line account, most brokers offer portfolio tracking,
cash balance, research, and real-time price and volume ticker. They take
care of dividend reinvestment and other bookkeeping chores automatically.
End-of-year buy and sell tax information is sent out the first of February.
That makes life easier. They would not last very long if they were not
Alamo PC has four SIGs dealing with the stock market. Individual stocks
and mutual funds are used as examples but buy and sell recommendations
are not given. The main reason I go; I get to talk to smart and successful
people. Like they say, “If you want to fly with the eagles, don’t hang
around a bunch of turkeys”. Come to one of these to get personal questions
answered. (We all have opinions).
The Financial SIG
meets the third Saturday from 9am till noon. General market topics are
discussed. Some members present their favorite subjects and guests are
invited to give presentations. Time is allotted for questions. Norm Black
is the whip.
meets first Thursday from 7 till 9pm. This SIG uses IRL to screen stocks.
A wide verity of technical and fundamental criteria can be selected as
a filter to cut down the 8000+ stocks to a few that you would like to own.
Maynard Burstein chairs this SIG.
meets the first Monday from 2 till 4pm. The group uses this software package
to mine for the best stocks to own. They share information and methods
of using the product. Dick Troost is the contact.
meets first Wednesday at 7pm. Monocle deals more with mutual funds. If
you are interested in mutual funds, this software keeps you in the hottest
one. Talk to Eric Weissgarber or Walter McGinnis.
Normal stock market hours are 9:30am to 4pm east coast time. But
the overpowering volume demanded longer hours. Recently, individuals have
been allowed to trade extended hours, about 1-½ hours before and
after normal hours. Pacific rim, Japan, and Europe stock exchanges stretch
trading times around the clock.
While visiting a chat room recently, I heard about this fantastic company.
Obscuer Company of Indonesia. As soon as the patent clears, it will revolutionize
the auto industry. When the president of the company gets the first contract
signed, the rest of the automakers will have to go along or go out of business.
Unfortunately, this type of story is a scam to get people to buy and run
the price up. The person who puts out stories like this, dump their stock
when the suckers buy in at the higher prices. The take-home lesson here
is ‘‘Be careful in chat rooms’’.
If you are using the research available to you and buy a stock with
medium or long term in mind, you don’t need a fast modem. A fast connection
is nice when bringing up charts, one after another. For me, Road Runner
pays for itself. I can cover more ground. Some spend one or two hours a
weekend, and others, hours each day doing research. For people that do
not have the time, knowledge, or interest, mutual funds may be the way
to invest. With funds, you are hiring a management team to watch things
for you. I read a book once in a while (ok, with pictures), and watch CNBC.
I learn something every time I go to a SIG.
Everybody is in the stock market indirectly. If you have insurance,
or your job has a retirement plan, you are in the market. It’’s no longer
‘‘Just for the rich’’. 51% of Americans own stock.
There are more than 8000 stocks and about that many mutual funds. Stock
screening programs and good data at your fingertips is available thanks
to the Internet.