| BUSINESSWEEK ONLINE : FEBRUARY 22, 1999 ISSUE | ||||||||
| ||||||||
 | ||||||||
| COVER STORY
The Investor Revolution In the pre-World Wide Web days, if you wanted to invest for your retirement, you'd call your broker and ask what looks good. He would sell you a financial plan and 100 shares of GE (GE) or maybe a mutual fund he was pushing. But you paid a stiff price: a couple hundred bucks commission for the stock or a 5% sales charge for the fund. Plus an extra percentage point or two every year to help pay for the fund manager's hefty salary. Today, the Internet is giving investors access to a wealth of free information and pushing commissions under $10 a trade. Meanwhile, index funds, which put investment decisions on autopilot, are beating active money managers by a mile. Since the bulls began running on Wall Street in 1982, the average equity mutual fund has underperformed funds pegged to the Standard & Poor's 500-stock index by nearly 3 percentage points a year. By moving to the Web and indexing their portfolios, investors are taking control of their finances. In this Cover Story, we describe the ruckus on Wall Street (page 112), where the Internet is both a boon and a threat. With some 14% of all stock trades now online, it's little wonder that Charles Schwab, E*Trade Group, and their digital ilk are riding high as old-line brokers rush out new online products and services. We'll also help you navigate the Web sites of the E-brokers and their old-line competitors (page 120). And we explain why low-cost index funds are the hottest item on the mutual-fund menu today (page 126) and how to use them to build a diversified portfolio. You now have choices you never had before. To read a letter to the editor about this story, click here. To read a correction/clarification about this story, click here. By William Glasgall in New York _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
|  |
 | |
 RELATED ITEMS COVER IMAGE: Who Needs a Broker? Who Needs a Broker? CHART: Mainline Brokers Still Control Most Assets...But Online Trading's Share Is Growing Will E*Trade Move Beyond E*Tragedy? Investor's Guide TABLE: Online vs. Old-Line Who Needs a Money Manager? CHART: Indexing Makes a Difference TABLE: Where Fund Managers Trail the Indexes...And Where They Still Outperform TABLE: Bond Funds Can't Beat the Indexes The Debate Goes On: Use Brains or Indexes? The Real Decision TABLE: Age before Risk: A Look at Three Portfolios INTERACT E-Mail to Business Week Online | |||
