Want to know how to develop a personal financial plan? Looking for a top-performing mutual fund? Wondering which software stocks are expected to enjoy the fastest earnings growth? Answers to these and almost every other ima
everal new books can help investors find, sift, and use the Web's vast cornucopia of information.
As the depth and breadth of these books demonstrate, the Internet is fast becoming an essential capitalist tool. Enter the word "finance" into the AltaVista search engine, and you will retrieve more than 5 million Web pages, almost as many as if you enter the word "sex." But unlike most porn sites, financial ones usually deliver what they promise, and many are free.
Their proliferation may transform how we invest, empowering individuals to take control of their financial futures in ways that were difficult or impossible before. A few years ago, most people had to rely on brokers for in-depth stock research and real-time price quotes. Today, anyone on the Internet has access to far more information than any broker had in 1994.
And information is just the beginning. Online trading is giving small investors the inexpensive access to financial markets that only big institutions formerly enjoyed. According to Barron's, online customers last year accounted for 17 percent of all retail stock trades, double the level of the year before. The average commission charged by the top 10 online brokerages dropped by more than half, to $15.95. Eventually, investors may bypass brokers entirely by posting trades directly on the Net.
Despite its title, Boot Your Broker! by LauraMaery Gold and Dan Post does not tell how to set up your own NASDAQ. It is a solid introduction to online investing, useful for anyone, but especially appropriate for those new to the world of finance, online or otherwise. The book explains some fundamentals of financial planning, citing many educational Web sites on concepts such as the time value of money and dollar-cost averaging. Basic information, augmented by more Web referrals, is provided for a wide variety of investments, from stocks and bonds to commodities, currencies, and collectibles. Boot Your Broker! includes details on the mechanics of making an online stock trade through E*Trade, a brokerage that receives special, favorable treatment throughout. E*Trade's president wrote the foreword, and a demonstration CD-ROM for E*Trade is included. The authors do not explain the connection except to say that E*Trade is "the primary reason this book exists." The book does give cursory information about 10 other online brokerages.
A fuller and more balanced treatment of 19 cyber-brokers is provided in Wall Street City by David L. Brown and Kassandra Bentley. This is an extensively illustrated reference guide to investment information on the Net, with dozens of reproduced Web pages to give a visual sense of the information available at various sites. It covers all the basics, though even experienced online investors may benefit from the book's thorough coverage of some abstruse topics, such as technical analysis and portfolio monitoring programs. But Wall Street City has an ax to grind. Coauthor Brown is the proprietor of a fee-based financial Web site that he plugs every few pages.
Perhaps the Internet's most important impact is the way it eliminates distance, allowing us to span the globe with a mouse click. For global investors, the Net offers a wealth of information on foreign economies and markets. This is the special focus of Investing Online by Stephen Eckett, who has traded futures and derivatives in London, Hong Kong, and Tokyo. Like other books, this one covers all the major U.S. financial Web sites, but it also includes a directory of sites in 44 other nations. Here's where to go to check the price of a stock on the Thailand stock exchange or to find out the unemployment rate in Sweden. Eckett offers some thoughtful musings on the long-term impact of the Internet on how we will invest in the future. Among other things, he believes the boundary between investment and gambling will blur, then disappear completely. We'll sell gold short and bet on the World Cup from the same computer screen.
None of these books so far has much to say about the investment vehicle of choice for most Americans and many others: mutual funds. Fortunately, this gap is nicely filled by Mutual Funds on the Net by Paul B. Farrell. It provides a selective guide to fund-company Web sites and other online sources of information invaluable to mutual-fund investors. Farrell does a good job of explaining the fundamentals of mutual funds, offering a 10-step program for choosing, buying, and tracking funds electronically.
The unavoidable problem with online investment books is that they are out of date even before they go to press, as the Internet mutates hourly. But these four books provide a comprehensive guide to the important topics and the major sites. For the latest, log on.
Barry Mitzman, Amazon.com's Personal Investing and Finance editor, is host of "Serious Money," a weekly TV series that is broadcast on PBS stations throughout the Pacific Northwest.
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