The internet has been one of the most revolutionary and disruptive technologies in history, creating a major paradigm shift. It's had a profound impact on how consumers listen to music, watch movies, buy and sell products, and communicate. It's also had a hugely beneficial impact on investing, especially for 澳洲幸运5官方开奖结果体彩网:retail investors.

The Evolution of Communication

The wide availability of information is perhaps the biggest benefit that the internet has had on investing. A retail investor's best bet used to be to head to the local library to read financial literature and research companies and securities such as stocks, bonds, and mutual funds.

Their other option was to contact a company directly for its latest financial report. This could prove costly in terms of postage for large financial reports and it could take some time. The investor would have to wait until the report was printed and sent by the firm's investor relations department.

An investor can find an online company report from the 澳洲幸运5官方开奖结果体彩网:Securities and E✱xchange Commission (SEC) website immediately on the internet after it's posted. Large financial documents can be downloaded within seconds and can be searched for keywords, topics, or specific financial statements.

Hundreds of websites also🐭 maintain and compile financial information for investors ♛to analyze and understand. Financial intermediaries such as brokers and investment managers once had an advantage over individual investors. They had more resources to obtain large financial reports or pay for expensive services to perform security analysis. Many websites provide free financial information while others charge nominal annual fees for more specialized data.

Lower Fees

The effect it's had on lowering fees for investors is another primary benefit that the internet has had on investing. Retail investors have seen a dramatic decline in the commission rates they pay to trade securities. It's not uncommon to find an online broker accepting $0 to make a common stock trade. Full-service brokers were able to exert their control over the market before the wide av👍ailability of discount brokers. They could charge what seems like exorbitant commission rates.

A Money Magazine article detailed that a full-service broker could charge a 2.5% commission for a stock trade in 1992 right as the internet was beginning to enter the consumer market. The example provided was a $250 commission to trade 100 shares of a stock trading at $100 per share.

Trading itself has benefited from electronic networks that can send trade information through internet piping. 澳洲幸运5官方开奖结果体彩网:High-frequency traders (HFT) are often the subꦇject of much controversy. They're accused of contributing to above-average stock market volatility but they've also been credited with reducing bid-ask spreads. This is the cost difference that exists when you're buying (the bid price) and selling (the ask price) a security.

The spread is down to💧 pennies but it used to be much wider. It allowed brokerage firms another opportunity to take money froꦉm investor pockets.

Other Key Benefits

⛦A 2000 academic study from the Wharton Business School summed up the key benefits the internet has had on investing in three principal factors.

The first was transparency or the ability for a much w♓ider base of investors to analyze information and come to their own conclusions on how to properly price securities.

It also defined differential pricing that speaks to the demise of full-service brokers charging high prices until the internet significantly lowered the𒅌 costs the industry could charge to make financial transactions.

Finally, it spoke of disintermediation. This again referred to the ability for investors to bypass old-school, full-service brokers and advisors for both information and the trading of securities.

The Bottom Line

The internet has placed considerable power in the hands of individuals. This has had a profound effect on how an investor obtains financial information. It's lowered costs significantly for most financial market participants.