Living in the Stock Market Moment

Posted by: Ben Steverman on June 24, 2008

Are the stomach-churning ups-and-downs of the financial markets not quite thrilling enough for you? Do you crave instantaneous, immediate connection to the stock market? You’re in luck.

Today the New York Stock Exchange (NYX) announced it is providing “realtime” data on stock prices. In the past, most Internet sites offer stock price movements with a 20-minute delay. Only brokerage customers typically have received instant access to market data.

Google and CNBC are the first to offer NYSE’s instantaneous price information, though Yahoo Finance recently added instant data from electronic communications networks through NYSE’s upstart rival BATS Trading.

A Google exec is quoted saying this “is an important step towards helping investors make more informed and timely investment decisions.”

I’m not so sure. Unless you’re about to buy or sell a stock (in which case you would be using a brokerage site), you can probably afford to wait 20 minutes to find out how a stock is doing. The one exception is when major news breaks during the day, and you want to know how a particular stock is reacting in real time. Even so, is such second-by-second obsession really good for your mental health?

Don’t get me wrong. I’m not opposed to instant data; I’m just wondering who is going to find this particular innovation useful. If you find it helpful, I’d love to hear from you.

It’s hard to believe that less than a generation ago, the vast majority of investors had to wait for the next day’s newspaper to find out how their stocks were doing. There was no Internet, no CNBC, and most trades were executed by human beings on an exchange floor, not computers buying and selling shares in nanoseconds.

All the speed and technology has definite advantages. It’s more efficient and it’s harder for insiders to take advantage of amateur investors (like the old wire houses often did). But it can also make for a more excitable, turbulent stock market during times of uncertainty.

Most financial planners advise individual investors to avoid paying too much attention to the daily, hourly or minute-by-minute movement of their portfolios. It’s just too hard to remain emotionally detached amidst the tumult, and remaining calm is often the best way to avoid big mistakes.

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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