Bringing Wall Street Home: Computers and the Internet Have Made Securities Trading from Home Easier Than Ever
Muhammad, Tariq K., Black Enterprise
A quiet revolution is under way in the stock market. More and more consumers are forsaking brokerage houses to test the stock trading waters from the comfort of home.
The wealth of information available on the Internet, and through stock quote services, has made it possible for many investors to manage their stock portfolios from their home computer. Last year, Louis Hureston, 35, earned $15,000 trading securities from his Rockville, Md., home, with a 50% return on investment. Equipped with a PC with a 14.4 kbps modem, Prodigy and America Online--both of which offer specific investor tools and information--he has taken the mystery out of day trading.
Hureston has been trading from home for the past two years. An electrical engineer and owner of an information technology consulting firm, Hureston Associates, he had previously done isolated trading of no more than two or three stocks a year through a brokerage house. He began home trading after taking a voluntary severance package, which included a pension payout and a 401 (k) plan, from his former employer.
"I was looking for a way to earn more than the 4% return that I would get from a bank," says Hureston. Taking advantage of an option to manage his own pension plan, he transferred it to a brokerage account in the form of a self-directed IRA. Hureston was ready to trade. But he recalls, "I nearly lost my shirt the first time I traded without any advice from a broker."
In-depth company information was the critical piece of the puzzle he was missing. "Intelligence gathering is the most important aspect of home trading. I wouldn't recommend trading without it," asserts Hureston.
H. William Rutherford III, a financial consultant with New York-based Americorp Securities, agrees. "You have to make the commitment to watch the market and gather a great deal of information on companies prior to trading--or you could set yourself up for a big loss. …