The Internet and Money
The Internet’s relationship with money is uneasy. The biggest problem is the lack of guaranteed security. Let’s see something about online share dealing, online banking, online shopping, online selling and online games.
In this article, we will deal with online share dealing, online banking and online selling. The other topics should be a little more detailed, thus the online shopping and the online games will be presented separately.
The Internet can help with share dealing in three ways:
- it can be used to supply information about share prices and the past and present performance of companies;
- e-mail can be used to send buy-and-sell orders to a broker;
- help, tips and support and available online from other investors.
Up-to-the-minute share information is available from anumber of subscription services. These offer a range of options, from free trading summaries at the end of eahc day to up-to-the-minute share prices direct from the stock exchange.
A variety of news and other services – for example, full summaries of a week’s trading, supplied in a form that will work with various popular financial software packages – are also available. These can be copied to your computer and analysed in your own time. Much of this information is also available in paper form, but many people seem to find the electronic option more useful and easier to work with.
The business of buying and selling on the Internet is done via brokers, who accept e-mail requests and provide e-mail confirmation of a trade. Many brokers on the Internet charge a flat fee instead of a percentage commission and this makes them good value for large transactions.
For help and support with share dealing, online services are the best choice. The combination of instant access to prices, speedy buy-and-sell facilities and plenty of online help and support make the Internet an unusually potent way to play the markets. The international nature of the Internet also makes it easy to build up portfolios in markets beyond the UK, especially in the USA, where it is possible to use US brokers to trade shares on the US markets from the comfort of one’s home in the UK. However, investors should be aware that, because the Internet is not totally reliable, it is perhaps best thought of a useful addition to existing trading facilities, rather than a replacement.
As a caveat, it is worth nothing that, just because online share dealing can be done, it doesn not mean it should be done. The Internet makes “day trading” – almost instant buying and selling – an option for many people. But in the US day trading has proved to be an excellent way for newcomers to lose large sums.
Share dealing is a high-risk pastime. Professionals frequently have access to sources of news and information that amateurs do not, and as a result, the access to “instant” share trading does not necessarily mean that the playing field is as level as it appears to be.
Since it was introduced in 1997, the online banking is taking off quite rapidly. Nowadays, almost every bank in the world grants access to your account using the Internet. Not all of them. Many banks and buiding societies now offer an online service. Some use proprietary software; others offer widely available packages.
The security issues and technical teething troubles that plagued the earliest online banking experiments seem to have been largely cured. The charges (either nominal or non-existent) have to be set against the convenience of being able to check balances and make payments at all hours of the day or night. In short, Internet users will find these services are well worth experimenting with.
You can of course use the Internet to sell items, as well as buy them. Doing this professionally is known as e-commerce and we will speak about this in a future article, because there are too many things to say about it. But you can stilluse the Internet to sell second-hand items you no longer want or need. If you have something unique to sell, you can open an online shop and start your business.
Newsgroups can offer a good way to do this. You can promote your business on Twitter and post about diverse items you are going to sell on Facebook, MySpace and other social networks. You can sometimes still sell items televant to other groups, which are more specialised, for example, you can sell old folk music CDs in special networks that bind together individuals who like this kind of music.
What is and isn’t acceptable depends on the culture of each individual group and if you check the archives or subscribe to a group for a while first, it will be soon become obvious whether the attempt will be worth any flak you may attract.
On the Web, the online auctions are very popular. The most widely used is eBay at www.ebay.com. A UK version is available at www.ebay.com/uk. Finally, you can of course list items for sale on your own Website. There is something that people seem oddly reluctant to do, but there is no reason not to take advantage of any free Web space your ISP may supply in this way.
