- new method of delivering information
- new form of investment
- gives opportunities for people to learn
- internet is making high quality of stock information available almost instantly to investors. The large amount of information is useful on decision making process.
- predicted that online brokerage accounts would soon replace the traditional brokerage accounts. Online investment is lower cost, convenient and 24/7 accessibilty that makes investors attracted.
- there are many online trading platforms that allow people to learn and gaining knowledge such as Forex Trading Malaysia, OSK investment challenge and so on.
We would like to discuss on the DOT COM bubble burst during the late 1990s and early 2000.How this actually affect the behavior of people to buy stock online. Hope you all give us some comments or experiences.
Thank you.
Hello Jeffrey and Alvin,
ReplyDeleteI was exploring Forex earlier on during my free time. Although a lot of people are scared of losing money from investing in stock market et cetera, there are ways to lower the risks of losing your investment.The internet can help lower the risks. It is wise and safer to open a Forex demo account for beginners to explore Forex.It is advisible to trade with a
demo account before opening a live account with real money (Forexmalaysia, 2010).
A lot of investors are sceptical of safety of deposits and safety of broker (forextraders , 2010)
However,investors can use your Internet search engine for forex trading courses and tutorials, and you will be provided with links to hundreds of websites (fxpals, n.d.)
With internet,online forex trading courses also offer members access to historical trends and data, free forex trading software, live chat with forex experts, interactive videos and multimedia, libraries of free e-books and articles, and many other resources (fxpals, n.d.).
Although Forex trading require lots of time to anlyse and study, nowadays there is a software which is known as Forex Robot which works continuously throughout the day and night over the year and helps in opening and closing deals the moment it finds an opportunity favorable to the user (forexpowerrobot, 2010).
The forex robot studies the market and builds up a database. Based on this database it puts various calculations into practice and tries to capture an opportunity immediately when it finds the situations favorable for the client.
Understanding foreign exchange rates is very tiring and tricky since there are different buying rates and selling rates but all these are taken care of by the forex robot who is intelligent enough to pick up the best rate and close a trade immediately so that the operator earns a profit. The robot moves along with the latest rates and updates its database quickly so that the profits could be maximized. Based on historical records, it can close a deal immediately once the peak is reached. the forex Robot software is indeeed an impressive online technology.
Next, investors are concern with scam. Investors are advised to carefully read reviews of forex services left by other traders carefully first before investing. Forex Peace Army is an online community that offer thousands of reviews of Forex companies (forexpeacearmy, n.d).All the reviews are read by the human editors and verified with the set of proprietary techniques before getting posted. Therefore this online community care for the safety of oline trading.
I think the internet can greatly help people invest more safely and easily.
List of references:
Forexmalaysia, 2010,Forex Malaysia signals, viewed 4 October 2010
http://www.forexmalaysia.org/forex-malaysia-signals.html/
Forextraders: learrn ,anlyse, execute,2010,Forex Broker Reviews,viewed 4 October 2010
http://www.forextraders.com/forex-broker-reviews.html
fxpals, n.d ,the benefits of online forex trading, viewed 4 October 2010
http://www.fxpals.com/benefits-online-forex.html
Forexrobotpower, 2010, Forex Robot Is The Auto Pilot Way That Earns You Profits Even When You Are Asleep ,viewed 4 October 2010
http://www.forexrobotspower.com/
Forex peace army: scammers pray that you dont join us today,viewed 4 October 2010 http://www.forexpeacearmy.com/
Yes, I do agree with Jeffrey that Internet is a new form of investment and it gives people the opportunities to learn more about stock trading in the stock market. It can be seen that stock investors have immediate access to an enormous amount of data and also able to create a tremendous opportunity in the economy in general and in the financial sector through disemminating information (L. Victor 2005). Also, before the Internet, investors would use the traditional method of stock trading where they would obtained financial news and advice solely through their traditional brokers, who charged considerable fees and commissions. According to L.Victor (2005), with the high cost of traditional brokerage, it can be seen that investors in the past would mostly be the higher income earners compared to the low-moderate income earners.
ReplyDeleteAlso, with the new way of trading stocks online through the web have let investors to control their selection of portfolio and control their level of risk. Thus, investors are able to control every financial aspects of their investment through the Internet.
However, during the Internet 'bubble' of the late 1990s, and the bursting of 'bubble' in 2000, the online trading of stocks through in the stock market have cause excessive trading, herding, high-volatility and especially excessive high-risk taking (L.Rodney, 2001). Also, stock trading have increase due to the 401(k) plan of the employees retirement fund where the employees put some of their paid income into their retirement account for retirement. Thus, some investors can be seen using their retirement fund to invest in the stock trading which is also one of the cause for the Internet 'bubble' in the late 1990s.
It can be seen that as more and more investors start to trade stocks online, there would be a change in the transaction cost (time cost) which then induce changes in trading frequency and size compared to the traditional way of trading stocks. In the end, there would be a rapid growth in the stock market which then lead to the bursting of 'bubble' in the early 2000.
In conclusion, the Internet has change how things work in the stock market where more and more investors have start to be their own brokerage as online trading have given an easier excess to information and opportunities for new and young investors (potential investors) to participate in this new era of Stock Trading.
References:
L.Victor, 2005, The effect of the Internet on stock market volume and volatility, viewed on 7 Octorber 2010, http://www.allbusiness.com/technology/602565-1.html
L.Rodney, 2001, How Does the Internet Affect Trading? Evidence from Investor Behavior in 401(k) Plan, viewed on 6 Octorber 2010, http://finance.wharton.upenn.edu/~rlwctr/papers/0114.pdf
The Internet is a great way to achieve the information that we need with the most current topics available for use. The internet and high technology firms have created an environment of advancement and opportunity for people worldwide. It has brought a new light to look at everything in our ever-changing society. It allows us to use our own intuition about thing and operate in a way that we seem to benefit from the most. Back in the earlier days people had to go through brokerage firm to trade their stocks. With today’s technology people are able to trade stocks from their homes. Another thing is that brokers do not have to be on the spot to make the trades their clients may want but they can take care of it over the computer all over the world at any time. With this advancement investors are able to do the trading themselves, which virtually eliminates any brokerage fees that might come about by going through a broker.
ReplyDeleteThis new access allows people to make low cost transactions and access real time stock quotes to make their necessary purchases. Technology allows traders to do thousands of dollars transactions in just a couple of mouse clicks. Being an investor and making your own decisions on investing allows you to take total control of your money. There are over two hundred brokerage dot-coms out there to make your trades.
This technological advancement gave way for businesses to operate through the computer. The stock market was affected greatly by this advancement. Instead of going through a broker to buy, sell, and trade stocks people can now do this themselves over the Internet. The Internet has brought about a new way of looking at things for stock purchasers. This network through search engines and companies like e-trade allow people to research stocks, for example finding up to date trends on a particular stock and then being able to purchase it without any problems. This way by use of the Internet, people can build their stock portfolio from their home.
Thanks for the comment...guys..Its seems like most of you have the same opinion that internet does make stock market more accessible and convenient for people to invest. You have highlighted some of the advantages and disadvantages that will really help in our research.
ReplyDeleteHalo!
ReplyDeleteWow, this is interesting where the internet can actually affect the stock market. Yes I believe it can actually do so. As for my own personal experience, you are right that it is a new method of delivering information, as my aunt also frequently plays in the stock market. She used to stay up late to check on the information on the company, whether to purchase its stocks or not. After that she will then talk to us about this company having its confidential information leaks out or even an internal conflict happened and etc. All this information can actually results to the overall performance of the company and eventually influence the users of the information. This means that if any information leaks out from the company, it may influence the decision making of the stakeholders. For example, bad news will lead to shareholders selling off their stocks and good news will eventually promote more stakeholders to purchase their stocks and leads more money capital coming into the firm. Therefore, with the use of the internet, it can transfer a whole load of information to stakeholders in an instant. This may be good or even bad information, which I believe may both be untrue and not reliable. What I would like to point out is that some people might have bad intention and they want to influence other users of the information to make decisions once they read the information. This is important as information through the internet is largely left available for almost everyone and even if some may chooses not to trust this information, there will still be a relatively large group of users to be actually deceived by it. Thus, information through the internet is actually quite unreliable as it is easily manipulated by simply anyone. As a conclusion, my opinion is that the internet can actually affect the stock market, allowing it to fluctuate once there is any additional information available in the internet.
In addition to my previous comment, I would recommend this website, http://www.sec.gov/investor/pubs/cyberfraud.htm where this is a piece of information on how we can prevent internet fraud, which is on the internet investment scams. I hope it may be useful in adding a piece of information to the discussion! =)
ReplyDelete