Cyberspace investing.It's fast, it's convenient and the resources are vast. A friend tells you she's heard good things about XYZ XYZ interj. Informal Used to indicate to someone that the zipper of his or her pants is open. [ex(amine) y(our) z(ipper).] Co. You call your stockbroker to get more information. The line is busy. When you finally get through, he's out to lunch. An hour passes before he rings you back. "What's the price of XYZ?" you ask. "Up four points in the last hour." Whether you invest for your own account or work as a financial adviser, if you had used the powerful tools of the Internet, not only could you have done the research yourself but also you could have instantly bought the stock and earned those four points---all with a few mouse clicks. Cyberspace Coined by William Gibson in his 1984 novel "Neuromancer," it is a futuristic computer network that people use by plugging their minds into it! The term now refers to the Internet or to the online or digital world in general. See Internet and virtual reality. Contrast with meatspace. investing, while still in its infancy, is one of the fastest growing uses of the computer today: An estimated 14% of users who have Internet connections either access investment information or trade securities while online. The flood of people wanting to do their investing and banking online has not gone unnoticed by the financial community. Investment firms, such as Fidelity, J.P. Morgan, Charles Schwab Charles Schwab can refer to:
(World Wide Web) The common host name for a Web server. The "www-dot" prefix on Web addresses is widely used to provide a recognizable way of identifying a Web site. ") and others are essentially electronic bulletin boards directly accessible by telephone. For more information about some of the organizations mentioned in this article, see the sidebar, "Online Investing Resources," on page 66. Since new sites (also called "home pages") on the Web are added nearly daily, those interested in cyberspace investing should conduct searches on the Internet, using any of the following key words: investment, stocks, bonds and mutual funds. MATCHING YOUR NEEDS Some World Wide Web sites are very sophisticated. For example, on Bank of America's home page a visitor is invited to fill out a personal profile on investment interests. In subsequent visits, the Web site automatically brings together new information and financial tools that match the visitor's profile. Online investing takes varying approaches. * Direct dial-up Investors access their accounts directly by telephoning the investment organizations through their computers using conventional communications software (communications, software) communications software - Application programs, operating system components, and probably firmware, forming part of a communication system. These different software components might be classified according to the functions within the Open Systems or the communications modules provided in Windows and Macintosh operating systems. Once connected, an investor can then retrieve stock quotes and company information and even place buy-and-sell orders-- with no need for an intermediary Internet provider Internet provider - Internet Service Provider connection, such as CompuServe or America Online See AOL. . Examples of such direct (non-Internet) cyberspace trading locations are Quick & Reilly, Max Ule and AccuTrade. Many brokerage houses offering direct dial-up connections also can be accessed via commercial Internet providers. From the user's point of view, the only difference between the two services is aesthetic: Direct dial-up screens often lack the colorful graphics of the Internet providers. Nonetheless, the direct dial-up approach is relatively simple, quick and effective. In some cases, to access an investment account and to transact business using direct dial-up, the user must pay a set-up charge or purchase special proprietary software or both. Some examples of direct dial-up services An information service on demand. The term was popular when analog modems were the only way to connect to a remote system. See dial-up. that require special software from the investment firms: Fidelity Online Xpress, offered by Fidelity Investments Fidelity Investments is a group of privately held companies in the financial services industry. It is made up by two independent but closely cooperating companies, Fidelity Management and Research Corporation (FMR Co. ; Siebert OnLine, from Muriel Siebert Muriel “Mickie” Siebert, (born September 11, 1932, in Cleveland, OH), and known as "The First Woman of Finance", was the first woman to own a seat on the New York Stock Exchange and the first woman to head one of its member firms. & CO.; Quick & Reilly's recently introduced QuickWay Plus; and Charles Schwab's StreetSmart. All offer securities trading securities trading, financial activity involving transactions of property such as stocks, bonds, commodities, and currency (see securities). Although the trading of stocks and bonds dates back several centuries in many Western nations, the development of the , stock quotes, research and portfolio management online. The cost for the software generally runs about $50, although in some instances (such as Siebert OnLine) all or part of this cost is waived depending on the size off your account. Several investment firms (Quick & Reilly, Max Ule and E*Trade) also have set up electronic links with the major commercial Internet providers to give investors multiple access paths to their brokerage accounts. Software alliances. A variation of the direct dial-up method that relies on an alignment between a financial institution and a software vendor. For example, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Netguide magazine, 26 banks now have aligned themselves with companies that sell personal financial management software: Intuit (Quicken), Meca Software (Managing Your Money) and Microsoft (Money). With the software, users dial their banks and download information about their personal accounts directly into the financial management software. In most cases, users can transfer funds and "write" electronic checks. Internet connection. A third approach requires the investor to have access to a Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. . Access providers come in many shapes and sizes--from the commercial online services. such as America Online, CompuServe and Prodigy, to small local organizations. Many schools, companies and government facilities also offer easy Internet access See how to access the Internet. . One feature the commercial Internet services offer is the investor forum--the electronic chatrooms where investors can swap stock advice or seek information. Be aware that such forums, while often providing good information, may be stalking grounds for promotors seeking to influence investors. Whether you choose to access your broker through the Internet, direct dial-up or a commercial online host, the investment services available generally are similar. Investors usually can get market statistics, such as the Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance and Standard & Poor's averages; look up stock, option, bond and mutual fund quotes; and place buy-and-sell orders. They also can review their portfolios; place market, stop or limit orders; receive confirmations of executions; and send messages to their brokers at any time. Some of the more sophisticated online investment services, such as Quickway-Plus, also offer access to Reuters' worldwide news clippings service and Morningstar and Standard & Poor's databases. In addition, investors can get put and call options using the Black-Scholes model (see "FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). 123: Putting Together the Pieces," JofA, Jan.96, page 73) and analyze portfolio performance against, say, the consumer price index. Some of the major full-service brokerages have been slow to embrace cyberspace investing and banking, at least when compared with many of the discount houses. But that surely will change as interest grows. There currently are only a handful of brokers that offer investment services via the Net. Lombard Institutional Brokerage Services is one, for example, that offers enhanced real-time trading and research information. Charles Schwab has just introduced e.schwab, which allows investors to enter trades over the Internet. Other companies offering Internet stock Internet stock The equity security of a company engaged primarily in a business associated with the Internet. Also called dot-com. market data and trade executions in some form include Pacific Brokerage Services and National Discount Brokers. Although it has a range of charges, one of the better cyberspace financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. companies is PAWWS Financial Network. PAWWS is the closest thing to one-stop shopping for your investment needs--offering everything from integrated portfolio accounting to research tools to real-time or delayed stock quotes. It even offers a choice of four brokerages. However, many of its services come with a price tag. SALES PITCHES, TOO Where the Web has proven to be really helpful is in providing investors with vast amounts of research information and stock advice. Many sites offer only samples and are intended to sell a product or service. Others have more to offer. One Web site, called the Wall Street Directory, is a golden resource for computer-knowledgeable traders. This single site contains more than 2,500 pages of information for investors to browse through. It links to dozens of additional Web sites. Fidelity Online Investor Center and Vanguard are excellent Web sites, with significant content to help investors learn about their respective mutual funds. While these sites offer helpful services, such as ways to estimate your retirement savings needs, like many others, sales pitches often are part of the menu. However, despite the pitches, they are still worth a visit just to see what investor cyberspace has to offer. Not all cyberspace is trying to sell you something. You might want to start your day by reading a free online update edition of the Wall Street Journal. It provides a summary of financial news, indices and news features. Or, for broader news coverage, you can tap into the free cyberspace version of the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times. If you want to troll for investment tips, check out the "raise.invest" on the Internet's Usenet. The Usenet is a global collection of thousands of bulletin board-type e-mail messages from special-interest groups. But, beware; such sites tend to be prime hunting grounds for seam artists. THINK SECURITY If you are considering investing or banking through cyberspace, give some thought to the security of the information you are sending and receiving. According to David Stewart David Stewart may be:
consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , two of the three necessities for securing Internet transactions exist today--and the third is just hitting the market:. The first security requirement is encryption, which ensures that your information can't be altered as it travels along the Internet. The second is called private-public key cryptography, which authenticates your data's origin and destination. The third, which is not yet fully operational, is verification of the authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. . Not all investors are worried about that gap in security, claiming that buying and selling by telephone can be equal]y risky. For more information about security, check out the Netsurf Web site. Fortunately, a few of the Web-site browsers already include some built-in security. Netscape's Navigator, for example, when connected to a NetSite Commerce Server (another Netscape product), automatically encrypts any credit card (or other identified secure) data. Only the NetSite Commerce Server can decrypt To convert secretly coded data (encrypted data) back into its original form. Contrast with encrypt. See plaintext and cryptography. it. Users of the Navigator know when they are connected to a secure NetSite server because the key icon in the screen's lower left corner changes to a solid key from a broken one. We are not suggesting that users need to become experts in data encryption data encryption, the process of scrambling stored or transmitted information so that it is unintelligible until it is unscrambled by the intended recipient. Historically, data encryption has been used primarily to protect diplomatic and military secrets from foreign and authentication schemes--but before you begin using a cyberspace service for trading, ask the provider about security. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , happy, safe and successful investing. EXECUTIVE SUMMARY * THE INTERNET IS BECOMING a vital tool for investors--whether you invest for your own account or work as a personal financial planner Financial Planner A qualified investment professional who assists individuals and corporations meet their long-term financial objectives by analyzing the client's status and setting a program to achieve these goals. . * CYBERSPACE INVESTING, while still in its infancy, is one of the fastest growing online activities, with an estimated 14% of users who have Internet connections accessing investment information or trading securities via the Net. * ONLINE INVESTING SERVICES use different approaches. Direct dial-up allows users to access their accounts directly via computer. Once connected, an investor can retrieve stock quotes and company information and place buy-and-sell orders. * A FEW BROKERAGE HOUSES offering direct dial--up connections also can be accessed through commercial Internet providers. * IN SOME CASES, to access an investment account and to transact business using direct dial-up, the user must pay a set-up charge or purchase special proprietary software or both. * ANOTHER APPROACH REQUIRES the investor to have access to a major Internet service. One feature the major commercial services offer is the investor forum-the electronic chatrooms where investors can swap stock advice or seek information. * WHILE MANY WEB SITES PROVIDE very useful information, they also dish out sales pitches to visiting investors. * ALTHOUGH INVESTORS DON'T NEED to become security experts themselves, they should ask their cyberspace trading services providers about security provisions. JOHN E. LEWISON is director of human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. at the American Institute of CPAs. He also is on the adjunct faculty of the University of Bridgeport University of Bridgeport is a private, non-sectarian university in Bridgeport, Connecticut, USA. Its campus is located in South Bridgeport on Long Island Sound. The University offers undergraduate, graduate, and health sciences programs. , Connecticut. PHYLLIS BERNSTEIN, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , is the director of the AICPA AICPA See American Institute of Certified Public Accountants (AICPA). personal financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against division. Mr. Lewison and Ms. Bernstein are employees of the AICPA, and their views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation. CASE STUDY Building a Cyberspace Business Steven I. Levey, a Denver CPA and personal financial specialist, works in cyberspace. For the moment, he says, it's a little lonely out there. "While many people are using Internet tools for investing, I'm seeing only a handful of CPA financial advisers." But that's going to change, he adds, and fast. "When we started our investment business last September, our goal was to have $10 million under management by the end of 1996; we'll easily reach that level." Levey is one of eight directors of a 40-person full-service accounting and auditing firm, Gelfond, Hochstadt, Pangburn & Co. In 1986, he says, the firm started offering financial planning services. "Then, last year, when we realized that clients generally were not implementing the investment part of their plans, we started handling clients' personal investments and pension funds." He says that his firm doesn't trade for itself. "We have a registered investment advisory firm, GHP GHP Georgia Health Partnership GHP Geisinger Health Plan (Danville, PA) GHP Governor's Honors Program GHP Good Handling Practices (food safety) GHP Grand High Priest Investment Advisers, and we limit our business to mutual funds." The brokerage business is handled by Charles Schwab & Co., a high-tech discount brokerage A discount brokerage is a business that charges clients significantly lower fees than traditional brokerages, typically offering comparatively fewer services and/or advice. house, using Schwab Link software assists clients in setting up accounts with the broker and then helps them implement trades. "We conduct a lot of our research on the ]Net;' the CPA esays. "We access Mutual Funds Magazine Online through its home page (http://www. mfmag.com) and, to get the latest (20-minutes-old) NAV See navigation system and navigation bar. (net asset value) for a fired, we access the Galt home page: (http://networth.galt. com), which tracks that data." Levey says the firm also uses Morningstar Principia prin·cip·i·um n. pl. prin·cip·i·a A principle, especially a basic one. [Latin pr  ncipium; see principle.] on a CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). and continually explores the new investment software services as they reach the marketplace. How did Levey get into cyberspace investing services? "Although we're a pretty high-tech firm [computer consulting is one of its services], I must confess that our clients demanded that we get into this--and we responded quickly "Frankly" he adds, "if we didn't do it, surely one of our competitors would have." Levey is convinced that the move into cyberspace investing was a good one. "It's the wave of the future, and we want to be in the forefront of technology. We are at the point where we soon will be able to dial into our clients' computers and do their accounting. Our goal is to automata automata - automaton all the routine and redundant work so we can spend quality time doing work that adds value." Levey offers several reasons for moving into this business. "There's the possibility of a flat tax, we keep hearing about tax simplification and then there's the proliferation of lowcost tax preparation programs. Clearly, a significant earnings base is under threat, and we must find alternate services and fees," says Levey, who charges a fee rather than a commission for his services. "What could be more natural than to get into investment advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal ? After all, CPAs are clients' most trusted advisers." Why then are CPAs slow to move into the cyberspace investing advisory business? "There are two reasons. And while neither is a good excuse for failure to take the plunge, they appear to hold back many CPA firms. First, it's expensive to get into high technology. And then there is the time it takes to learn the new programs and routines." When asked how he rates high-tech investing compared with the old-fashioned way, Levey says, "There really is no comparison. Research is faster, more timely and you can get more information. And it's lots cheaper. But let's face it, it's not a perfect world, and sometimes you have to wait for a decent phone line for the cyberspace connection or you suddenly lose a signal and you've got to dial in all over again. But the bottom line is it works very well." To reach Levey by e-mail: slevey cpa@aol.com. --Stanley Zarowin Online Investing Resources Internet Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. : http://www.bofa.com Charles Schwab (e.schwab): http://www.schwab.com Dreyfus: http://networth.galth.com/dreyfus Fidelity Online Investor Center: http.//www.fid-inv.com Holt Report: http://turnpike.net/metro/holt/index.html Investor's Edge: http://www.irnet.com J.P. Morgan: http://www.jpmorgan.com Lifenet: http://www.lifenet.com Lombard Institutional Brokerage Services: http://www.lombard.com Money Magazine Personal Finance Center: http://www.pathfinder.com/money Mutual Funds Home Page: http://www.channel1.com/users/fund/index.html Mutual Fund Research: http://www.webcom.com/fundlink Mutual Funds Magazine Online: http://www.mfmag.com National Discount Brokers: http://pawws.secapl.com Netsurf: http://www.netsurf.com/nsf.vol/ol/nsf.ol.ol.html NetWORTH: Mutual Funds: http://networth.galt.com New York Times (CyberTimes): http://www.nytimes.com Onramp Access Stocks and Commodities: http://www.onr.com/stocks.html Pacific Brokerage Services: http://www.tradepbs.com QuoteCom: http://www.quote.com S&P500 Index: http://www.secapl.com/secapl/quoteserver/sp500.html Vanguard: http://www.vanguard.com Wall Street Directory: http://www.cts.com:80/~wallst Wall Street Journal Money and Investing Update: http://update.wsj.com Zacks Investment Research Zacks Investment Research A firm that compiles earnings estimates and brokerage firm investment recommendations for thousands of publicly traded firms. : http://www.quote.com/zacks.html Telephone AccuTrade: 800-882-4887 Charles Schwab's StreetSmart: 800-334-4455 E*Trade Online Investing: 800-786-2571 Fidelity Online Xpress: 800-544-0246 Max Ule Brokerage Services: 800-223-6642 Morningstar on Demand: 800-876-5005 Quick & Reilly's QuickWay Plus: 800-211-6654 Siebert OnLine: 800-872-0711 |
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