Here's one for the history books. Remember the days of old, when you had to call your broker to get a quote on your investments or make a trade?
Remember when you waited until the evening TV news to find out what happened to the stock market?
Why, that must have been as long ago as ... the mid-1990s.
All that has changed, dramatically, thanks to the Internet revolution. You can now monitor the markets and your own investments as the trading day progresses. You can can get an instant snapshot of the mutual funds in your 401(k) or 403(b) retirement account. You can check out the charts, trends, expert comments, and investment prospects for the software company run by the dad of the girl your daughter plays with at day care.
You can push thousands of shares through the stock exchanges without so much as talking to another human being. Just "click here."
The Internet has changed the way Americans invest and, in equally dramatic developments, changed how much they pay to make their moves.
It has made them wiser, perhaps a little richer, and may attract more of them to the market.
But it could also drown unwary investors with information overload and lure others to the excitement of short-term trading rather than the wisdom of long-term investing.
Like the Model T and the telephone, the online revolution will most directly affect the common man.
Realizing the potential for new customers, brokerage firms are rushing onto the Internet. But as Wall Street merges with the information highway, experts expect cyberspace to remake the investment world, not the other way around.
Along the way, securities markets should become more open and accessible to the individual. Commissions, already falling fast, could eventually disappear, analysts say.
Besides investors themselves, big winners include banks, aggressive online brokerages with strong brand-name recognition, and smaller Internet advisers and trading firms that can exploit niches.
"We think there's going to be a major shift," says Blake Darcy, chief executive of DLJ Direct, the online arm of the DLJ brokerage firm in New York. "Virtually every single brokerage firm has realized it has to have an online presence."
Crowding the 'info highway'
"It's really the inevitable way that all people will do their investing," adds Alex Goor, executive vice president of Datek Online, a deep-discount online brokerage in Iselin, N.J.
No one expects full-service brokers to fade away, but by 2002, some $688 billion will be managed in online trading accounts - five times the figure for 1997 and nearly 5 percent of the total assets in retail investment accounts, forecasts Forrester Research, a market-research firm in Cambridge, Mass.
The Internet allows investors to download reams of data. Where they once called their brokers for the latest market movements, they now grab the information themselves.
"The more information you give to your customers, the more analysis investors can get on their own, and the less they need a full-service broker," says Mr. Darcy of DLJ Direct. Much of this information - from annual reports to market commentary and stock quotes - is free. Virtually all of it is cheaper than using a full-service broker. Even the discount brokers, such as Charles Schwab, have come under pressure from the low commissions charged by other Internet brokers.
"The more you empower people with information and the ability to act upon it, you're typically going to do more business with those people," says Tom Taggart, a Schwab spokesman in San Francisco. Its e-Schwab service is the largest online discount broker, with roughly half of the market.
But Schwab faces plenty of competition, enough to ignite a price war.
Fidelity, the mutual fund giant that also runs an online trading operation, recently cut commissions to about $15, and some brokers charge as little as $8 for many trades. Schwab's charges about $30 and full-service brokers more than $100.
"We firmly believe that at some point in the future, there will be a discount brokerage that will says: 'If you trade with us, it will cost you zero dollars,' " says Chris Hill, spokesman for the Motley Fool, an online financial education site.
"When you're at $8, I don't see much of a gulf to $0," adds Michael Gazala, a senior analyst at Forrester Research. Revenues will come from attracting clients to other services.
Still room for brokers
"All these price wars are great wins for consumers," Mr. Gazala says. But "the Internet doesn't mean the doom of Wall Street.... There are parts of financial services that are so arcane, so complex, that there will always be a need for a highly paid investment professional."
The online revolution is also changing the way people invest. Investors, for example, have access to some investment vehicles for the first time.
Companies offering their shares to the public for the first time (initial public offerings) can now pitch some of those shares to small investors on the Web as well as the traditional Wall Street groups that once enjoyed exclusive access to IPOs. Wit Capital (www.witcapital.com) is one place to look for such opportunities.
Investors are also going online to discuss stocks among themselves, sharing expertise that rivals, sometimes exceeds, that of the experts.
"People know Coca-Cola pretty well, but if a small computer company in a suburb of Boston comes out with some new software, chances are the world doesn't know about it," says Mr. Hill of Motley Fool. But some online investor does know about that innovation and might share it with other investors before the pros pick up on it, he says.
Eventually, online investing could become so cheap and easy that brokers will offer tailor-made portfolios, says Gazala at Forrester. You could ask for a portfolio that includes no major investments in alcohol or tobacco, for example. Such "personal funds," as he calls them, are already available for the wealthy.
The Internet would make them available for everyone.