Investment savvy on tap

Home computers can take the guesswork and legwork out of investment success. Ken Welsby introduces a special feature on how to spin a Web and Net some cash
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The Independent Online
Are you trying to pick the right PEP? Looking for a unit trust, or trying to make money in the stock market? Or simply looking for information to help you manage your money? Now, thanks to the latest computer and communications technology, you can do it directly from your desk or living room.

With the right software and data links anyone can now obtain in minutes the kind of detailed information that would otherwise take days - and cost a small fortune in stamps and phone calls - to track down.

Much of it is information that only a couple of years ago was usually the province of fund managers, stockbrokers and other financial advisers - and even today is not easy for the average private investor to find.

For an outlay of not much more than a tenner a month you can get the latest share prices and details of investment products such as unit trusts, PEPs and investment trusts - together with all the historical data you need to make intelligent investment decisions. And, of course, to complete the desktop money management package, you can also manage your bank account on-line .

On-line finance falls into two broad categories: public information, usually on the Internet, available free of charge, and subscription services, involving a monthly or annual charge - anywhere from about pounds 60 to pounds 2,000 a year.

Free services on the Internet include detailed information on a wide range of savings and investment products, such as the National Savings rates, unit trust prices and performance data. Subscription services include portfolio management, real-time stock market prices and even desktop share dealing; some of them use the Internet, others use teletext, Prestel or even satellite TV to deliver their data feeds.

If you are already on the Internet, all you need to get started is the Midweek Money list of World Wide Web addresses in our useful contacts panel on page 21. If not, here's what you need:

Almost any home computer - either a Mac or Windows PC.

A modem which connects your computer to the phone line. Expect to pay pounds 100 to pounds 150 for a reliable modem from an established manufacturer such as Motorola, Hayes or Multitech. Without getting technical, look for one which specifies a speed of at least 28,800bps, since this translates into faster connections and lower phone bills.

An account with an Internet provider which will provide the software and the physical connection - think of this as the "telephone exchange" which your modem dials to link your machine with the rest of the world. Expect to pay a flat-rate subscription of between pounds 10 and pounds 20 a month (normally by direct debit) and avoid firms which want to charge you for time spent on-line . Again, see the useful contacts panel.

Once you are connected, you may want to browse some of the more interesting Internet financial sites - but remember to keep an eye on the time, since the time spent on-line is adding to your phone bill.

Despite the "wealth warning" - remember that the value of your investments may go down as well as up, and you may not get back the value of your original investment - historical information, particularly performance data, can be an invaluable aid to investment selection. The Internet provides a huge volume of such material - much of it regularly updated. And thanks to the simple "point and click" interface of the World Wide Web, it is easy to obtain.

Retired banker Bill Foster has been using on-line investment services for the past three years both on his own account and for an investment club in the Thames Valley. He offers some simple advice to newcomers. "Don't be tempted to buy a Rolls-Royce when all you need is a Ford Sierra," he says. "If you are playing the market on a daily basis, you probably want real-time data and all the information you can get, so don't hesitate to sign up for a service which provides it. But if you are not playing the market day by day, you probably don't need that level of service.

"Are you a research buff? Do you want detailed historical data, stuff from the analysts and brokers' reports? Make sure you can get what you want. Following on from that, if you are looking at any of the proprietary, packaged services, ask for a demo before you buy. The first service I bought into gave me loads of info, but it was far too hard to dig it out.

"And the final point is this: if you are not dealing actively, do your on-line sessions at night or at weekends when phone costs are lower."

Much of the free financial information on the Internet comes either from the companies which provide the products, such as fund managers, or intermediaries, such as brokers and independent financial advisers. Material of this kind should therefore be read in the same way as a brochure or prospectus, rather than as independent analysis.

In some cases you will be asked to register your name, address and other information before you can see particular pages. This is not simply someone trying to add your name to a mailing list, it is required to ensure compliance with the regulations regarding disclosure of information under the Financial Services Act.

In that context, one final point to remember is that most of the on-line financial products and services are being sold without advice. In other words, a provider or intermediary is supplying information about the product which takes no account of its suitability for your particular circumstances. If the value of that investment does fall, don't expect your money back.

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