| BUSINESSWEEK ONLINE : MAY 24, 1999 ISSUE | ||||||||
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| COVER STORY
The Right Tools for the Right Trades How to exploit the expanding array of digital trading aids Investors who need to be in the know at any hour can now have news and stock-price alerts delivered to a pager, personal digital assistant, or cell phone. They have access to a World Wide Web filled with an astonishing wealth of financial and investment information. And they can pump all that info into sophisticated software to turn raw market data into smart trading strategies. Whether you trade stocks with abandon or salt away shares in mutual funds for your golden years, the trick is to exploit the expanding panoply of digital aids at your command. With a modest effort and a hand from BUSINESS WEEK, you can build your own computerized tool kit by selecting the smartest mix of Web sites, software, and wireless products to suit your investing philosophy (table, page 104). Before shelling out hundreds or thousands of dollars on software and gadgets, start with the Web. You'll find so much free stuff that you may never have to spend anything until you actually make a trade. Although not everything online is reliable, you can uncover Securities & Exchange Commission filings, trade gossip on initial public offerings, and seek the wisdom of respected economists and analysts. If technical analysis is your bag, BigCharts will lead you to 25 of the most popular technical indicators. If you're a global investments aficionado, J.P. Morgan's adr.com Web site has all the dope on American depositary receipts. BestCalls.com, meanwhile, publishes a guide to telephone conference calls that corporations run for analysts and investors (page 111). FREE VS. FEE. To get you started on the Web, head for Yahoo! Finance. It contains links to suppliers of news and financial data, including The Motley Fool and TheStreet.com. At Yahoo!, you can find lists of analyst upgrades and downgrades, news of earnings surprises, and Reuters headlines. You can also construct stock, bond, and mutual-fund portfolios. But as you range across the World Wide Web, also keep an eye out for sites that offer screening tools for analyzing securities based on earnings multiples, growth rates, and other criteria that are in sync with your investment approach. Screening tools at free sites are generally more limited than those at sites that command a fee. Yahoo! Finance, for one, offers basic screening capabilities for free, based on just eight data fields. But you're restricted in how you enter the criteria. You can hunt for stocks priced between $25 and $50 but not for those between $40 and $50. Intuit's Quicken.com (www.quicken.com) is free as well. It lets you sift through more than 10,600 stocks based on screens that include up to 33 variables. Unlike with Yahoo!, you can enter any minimum or maximum value you want. I searched for stocks that had revenues of at least $1 billion, a five-year total return of at least 15%, a maximum price-earnings ratio of 16, and that were within 5% of their 52-week high. Thirteen companies fit the bill. Some data at Quicken.com is provided by Standard & Poor's Personal Wealth, (www.personalwealth.com), itself a wide-ranging source of online investments and, like BUSINESS WEEK, a unit of The McGraw-Hill Companies. Intuit's archrival, Microsoft, charges for some of the advanced features at MSN MoneyCentral Investor (investor.msn.com), but many of the tools it offers are worthwhile. Subscribers who pay $9.95 a month ($6.95 if MSN is your Internet service provider) can take advantage of solid screening capabilities. You can cull from a database of more than 16,000 stocks and mutual funds and create screens based on more than 300 variables. Once you have brought up a list of stocks, click on ticker symbols to view company descriptions and research reports provided by Hoover's Online, Disclosure, and Zacks. Other subscriber features include insider trading data and alerts on such things as sharp increases in trading volumes and stock splits. Wall Street City from Telescan also blends free fare with premium-priced services. The giveaways include delayed quotes, commentary, 10K filings, and the ability to construct a single portfolio with up to 150 symbols. For $9.95 per month, you can monitor up to seven different portfolios, retrieve historical quotes, and access a variety of fundamental and technical search criteria. The top tier costs $34.95 a month. It includes ''back-tested'' searches for evaluating assumptions. X-RAY VISION. Several fine sites, including Brill's Mutual Funds Interactive, cater to investors who concentrate on mutual funds. At Morningstar.Net, you can go right to the top: CEO Don Phillips moderates ''The Phillips File'' forum. Visitors to Morningstar can also track up to 10 portfolios, with 50 securities in each, for free, plus use ''Portfolio X-Rays'' to determine whether holdings are over- or undervalued. Premium subscribers ($9.95 per month, $99 a year), get more detailed X-Rays and can take advantage of screening tools that let them select among 15,000 funds or stocks, using dozens of criteria. While the Internet affords investors the most up-to-date financial information, it cannot deliver the number-crunching power of investment software. Stock Investor Standard and Pro from the American Association of Individual Investors (AAII) are fundamental screening programs that differ in the frequency with which data is updated (quarterly vs. monthly) and cost ($148 vs. $247 a year, less for AAII members). Off the same database of 9,000 companies, the standard version lets you screen for companies meeting criteria on more than 600 variables, the pro entry 1,500 variables. But if timeliness counts, you will do better with Value Line Investment Survey for Windows, which lets you download weekly updates off the Web. A package with 1,700 stocks costs $595 per year; one covering 8,000 issues costs $995. If you prefer technical analysis, you should choose a program with extensive charting or trading-systems features. Trading-systems indicators can generate buy and sell signals. Manhattan Analytics, for example, produces a trading program for mutual funds called Monocle II ($300, plus $240 a year for data, from www.manhattanlink.com). Among the stocks packages on the market are MetaStock from Equis International (www.equis.com), TradingExpert Pro from AIQ Systems (www.aiq.com), TC2000 from Worden Brothers (www.worden.com), TradeStation from Omega Research, and Internet Trader Deluxe from Window On WallStreet (www.windowonwallstreet.com). Each varies in the number and kind of technical indicators offered, and some blend in fundamental analysis tools. And many of these really are for the serious day trader. MetaStock Professional costs $1,495, but you'll also need a real-time data feed from Reuters or Data Broadcasting, and it costs: DBC charges $1,800 a year or $175 a month, plus exchange fees, for its eSignal feed. PALM POWER. If you are an investor who is constantly on the fly, Internet-ready cell phones, PDAs, and pagers can keep you in touch with markets and alert you when news affects your holdings. Reuters and Aether Technologies International offer MarketClip, a service that delivers real-time quotes, news, charts, and market summaries to certain 3Com Palm PDAs and Windows CE devices. The service costs $79 a month, plus exchange fees, and you'll have to supply your own hardware. Fidelity Investments will also keep you in touch via its new InstantBroker service. It zaps a market summary and real-time quotes to a two-way interactive pager from Research in Motion (RIM). Fidelity also serves the Iridium world phone, and when it appears, the Palm VII PDA as well. Those who carry the pager can also place trades using the device. The service is free for active Fidelity account holders, but you'll have to pay paging or phone charges and provide the hardware. BellSouth, the wireless network provider, sells the RIM pager for $359 or rents it in a variety of plans. The device has a tiny keyboard that's adequate for E-mail, and a wheel you click like a mouse. I could scroll down to see how my stocks were faring, and find out why the thing had just beeped. The answer: IBM's price jumped past the $205 trigger that had been set. How you jump on such news will decide whether you've assembled a smart digital investment tool kit. BY EDWARD C. BAIG _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 Your Guide to Online Investing COVER IMAGE: Our Guide to Online Investing CHART: The Biggest Online Brokers TABLE: Broker Scoreboards TABLE: Online Brokers That Meet Your Needs Gotta Do the Legwork ``A Diversity of Thought'' Testing the Waters Commentary: Why Old-Line Firms Need New Online Tricks TABLE: Full-Service Dream The Right Tools for the Right Trades Street.Cop TABLE: Smart Investing on the Web TABLE: Web Resources for Online Investors Rocket Science Made Simple TABLE: Quant for a Day How to Seal a Great Bond Deal TABLE: Where to Buy...And Get Info What to Read: The Good, the Bad, and the Terrible TABLE: Wired-Up Investing Books Investor Beware of Web Talk TABLE: Separating Fact from Fiction TABLE: Cross Checkers Smells Fishy? Tell the SEC This EDGAR Is a Real Know-It-All TABLE: Searching the SEC Commentary: Analyst Calls: Let Investors Listen TABLE: Calling All Netizens The Barker Portfolio: A Battle Plan for Accidental Investors Inside Wall Street: Wells Fargo Online CHART: The Rise Trails Other Banks Inside Wall Street: Bidding for 3COM? CHART: Prior Takeovers Fizzled Out Inside Wall Street: A TV-To-Net Linkup CHART: ACTV's Rise Is Due to E-Commerce INTERACT E-Mail to Business Week Online | |||
