Welcome to the world of internet investing

Published 7:02 pm Thursday, October 2, 2008

Is cyber-investing in your future? Would you like to use your computer

to locate the nearest financial-services office, calculate how much money

you’ll need for retirement, or monitor the performance of the stocks in your

portfolio?

For an increasing number of investors, the answer is “yes.” About 112

million people in the United States and Canada are already online.

Worldwide, that number is expected to grow to

about 250 million in the year 2000. Many of these people want access to the latest

financial information in a manner that is fast and efficient, and the Internet

offers a way for investors to bring Wall Street right into their own homes and offices.

As the demand for online financial information grows, more and more

financial-services firms are responding with Web sites on the Internet. During

a visit to a firm’s “home page,”

investors can select from a wide range of information and services. You’ll find

everything from current stock market quotes and commentary, to branch-office

locators, schedules of local events, offers for free literature and research reports,

and even career opportunities. Other features include e-mail capabilities that

enable users to correspond directly with the firm’s headquarters or local branch

offices and interactive pages that enable users to calculate earnings potential,

future income needs, future college costs and more.

An area of increasing interest among many online investors is the ability

to review their account information and to buy or sell investments on the

Internet. However, concerns about the security of confidential information, limitations

in gaining access to account information and trading capabilities on

high-volume trading days because of capacity-strained computer systems have

dampened some investors’ enthusiasm for these features.

In addition, while being able to trade securities day or night at the touch of

a button may sound tempting, a word of caution is necessary. History has

shown that investments held for the long term provide the most attractive results.

This means investors must be disciplined enough to avoid letting short-term

market events affect their long-term investment strategies.

Just as owning a medical dictionary doesn’t enable laymen to diagnose

their own illnesses, neither should online trading cause serious investors to

refrain from consulting with financial professionals. Buying or selling a specific

investment is usually the simplest dimension of the investment process. Far

more important is the relationship between investors and their financial advisers,

and the decisions that evolve from their consultations. Assessing an investor’s

risk tolerance, establishing objectives and weighing the strengths and

weaknesses of myriad investment alternatives are critical roles played by professional

financial advisers.

Wise investors use high-tech financial Web sites as a complement to

the one-on-one relationship they have established with their personal

investment representative. They use the sites as a source from which to gather

information and research ideas, ultimately relying upon their investment professional

to help them evaluate those ideas and determine the most appropriate

strategies based on their own long-term financial goals and objectives.

In short, financial expertise and knowledge play an essential role in

the broader context within which investment decisions and transactions are

made. Internet sites are a valuable addition to the broad assortment of services

offered by most investment firms and, used wisely, can be a useful asset to

an investor’s strategy.

Elaine Webber is an investment representative for Edward Jones

be reached at (425) 831-5026.