For investing by computer, options are many

STAYING AHEAD

April 11, 1994|By JANE BRYANT QUINN | JANE BRYANT QUINN,Washington Post Writers Group

NEW YORK -- Everywhere you turn these days, you find a

story about investing by computer. The cybernuts are already on-line ("on-line" means connected to a web of other computer users, through telephone lines; the prefix "cyber-" means computer). But what promise do the networks hold for investors not on the cutting edge?

Most of you will probably conclude that the old technology is simpler and cheaper:

* You can pick up the phone and talk to a stockbroker if you like his or her advice and research. You pay sales commissions, but they're a lot less than the cost of a personal computer plus the software and phone time that people spend on their cyberobsessions.

* If you pick your own stocks and mutual funds, you can buy through the fund sponsor or a discount brokerage house just by dialing an 800 number. You pay low or no commissions.

* For a touch of technology, several discount brokerage firms let you buy and sell by punching your orders into a touch-tone telephone.

At Fidelity Investments in Boston and Charles Schwab, headquartered in San Francisco, tele-clients get a 10 percent discount on transaction costs (although you can often buy even cheaper by calling a deep-discount broker with rock-bottom charges per share). Minimum commissions on a trade: $39 at Schwab, $38 at Fidelity.

Besides accepting orders on stocks, options and some mutual funds, Fidelity's and Schwab's touch-tone services let you review the status of your account, get current price quotes and check the latest market indicators.

You might also check the deep-discounter AccuTrade, headquartered in Omaha, Neb., which offers price quotes and touch-tone stock and option trading for accounts worth $5,000 and up. AccuTrade's minimum commission: $48 for buying or selling up to 1,600 shares, but with low per-share charges over the minimum.

If you already own a computer, however, and think that playing with it is fun, check into placing orders for investments on-line.

You might want to connect with a single mutual-fund family. T. Rowe Price in Baltimore, for example, lets shareholders use their personal computers (PCs) to buy and sell funds, review their accounts and check prices, yields and total returns.

You don't have to buy any T. Rowe Price software; all you need is your regular communications program plus a modem.

("Software," also called a "program," tells your computer what you want it to do; a "modem" attaches you to the telephone system.)

The major discount stockbrokers also let you invest by computer, with instant confirmation of trades. Quick & Reilly and AccuTrade require no special software. You just dial an 800 number to trade stocks and options, check prices and review your account. Quick & Reilly also provides news and company announcements.

At Schwab and Fidelity, however, you have to buy software. Schwab's new StreetSmart (in the Windows format) costs $59, including shipping and handling. Fidelity's On-line Xpress is $57.45 (a Windows version is due this year). Both are for IBM computers or their clones, not for the Macintosh.

Besides stock trading (at a 10 percent discount) and price quotes, Schwab and Fidelity offer trading in mutual funds and bonds. There's also market research, news, portfolio management and record-keeping; such services generally come at extra cost.

John Bajkowski, who edits Computerized Investing for the American Association of Individual Investors, told my associate, Louise Nameth, that StreetSmart is more "user-friendly" -- cyberspeak for easier to work with.

Finally, back to the cybernuts. They're signing up with one or more of the major on-line computer networks, which provide a huge range of information on numerous subjects.

You may pay a monthly membership fee, a flat-rate charge, hourly fees and fees for special services -- so your quest for knowledge isn't cheap.

Of the three major commercial nets, investors say, CompuServe carries the most business and investment information, Prodigy second and America On-Line, third.

All three offer on-line investing through electronic discount brokerage houses like ETrade, a deep discounter based in Palo Alto, Calif., PC (PCFN, on Prodigy), Quick & Reilly, Fidelity and Schwab. For touch-tone telephone users, PCFN is working on a phone trading system that includes a viewing screen.

Depending on the broker, you may be offered cash-management accounts, debit cards, tax records, news and financial data, along with the basic trading service. ETrade can also be dialed up from your home computer or accessed through a touch-tone phone.

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