Here's one for the history books. Remember the days of old,
when you had to call your broker to get a quote on your investments
or make a trade?
Remember when you waited until the evening TV news to find
out what happened to the stock market?
Why, that must have been as long ago as ... the mid-1990s.
All that has changed, dramatically, thanks to the Internet
revolution. You can now monitor the markets and your own
investments as the trading day progresses. You can can get an
instant snapshot of the mutual funds in your 401(k) or 403(b)
retirement account. You can check out the charts, trends, expert
comments, and investment prospects for the software company run by
the dad of the girl your daughter plays with at day care.
You can push thousands of shares through the stock exchanges
without so much as talking to another human being. Just "click
The Internet has changed the way Americans invest and, in
equally dramatic developments, changed how much they pay to make
It has made them wiser, perhaps a little richer, and may
attract more of them to the market.
But it could also drown unwary investors with information
overload and lure others to the excitement of short-term trading
rather than the wisdom of long-term investing.
Like the Model T and the telephone, the online revolution
will most directly affect the common man.
Realizing the potential for new customers, brokerage firms
are rushing onto the Internet. But as Wall Street merges with the
information highway, experts expect cyberspace to remake the
investment world, not the other way around.
Along the way, securities markets should become more open and
accessible to the individual. Commissions, already falling fast,
could eventually disappear, analysts say.
Besides investors themselves, big winners include banks,
aggressive online brokerages with strong brand-name recognition,
and smaller Internet advisers and trading firms that can exploit
"We think there's going to be a major shift," says Blake
Darcy, chief executive of DLJ Direct, the online arm of the DLJ
brokerage firm in New York. "Virtually every single brokerage firm
has realized it has to have an online presence."
Crowding the 'info highway'
"It's really the inevitable way that all people will do their
investing," adds Alex Goor, executive vice president of Datek
Online, a deep-discount online brokerage in Iselin, N.J.
No one expects full-service brokers to fade away, but by
2002, some $688 billion will be managed in online trading accounts
- five times the figure for 1997 and nearly 5 percent of the total
assets in retail investment accounts, forecasts Forrester Research,
a market-research firm in Cambridge, Mass.
The Internet allows investors to download reams of data.
Where they once called their brokers for the latest market
movements, they now grab the information themselves.
"The more information you give to your customers, the more
analysis investors can get on their own, and the less they need a
full-service broker," says Mr. …