How To Research and Invest Online

1. How To Research and Invest Online 8-5-10 1

2. Investing Online The internet allows investors to accessaccount information 24/7, initiate securities transactions from virtually anywhere, and quickly and inexpensively research investment opportunities. 9

3. Investing Online The days of keeping in constant contact with a broker and paying a fortune for stock trades are over. Today, more than a million trades are made everyday online. Thanks to the internet, people can now make trades just about anywhere from their couch, their lunch break or on the go. 9

4. Exercises in this classYou will: • Compare top discount broker sites • Set up a tracking portfolio on either Google Finance or Yahoo finance • Research one company website to locate investor information (SEC documents, annual report, events/presentations) • Track / view a company’s current activities/news using Google News • Set up an “alert” on Google News 3

5. 6 Things Every Online Investor Should Know • Start small. If you are new to online investing, don't put your entire life savings into an online account. 3

6. 6 Things Every Online Investor Should Know • Stay diversified. Develop a well-balanced portfolio of stocks, bonds, and cash. 3

7. 6 Things Every Online Investor Should Know • Don't bail on mutual funds. Keep your mutual funds; don’t cash out your long-term fund holdings so that you can start "playing the market" in individual stocks! 3

8. 6 Things Every Online Investor Should Know • Costs may not always be obvious. Even if online brokerage costs are lower than those of full-service brokers, they can still add up, particularly if you do a lot of buying and selling. 3

9. 6 Things Every Online Investor Should Know • Problems are inevitable. Trading online is not foolproof. There will be times when you can't access your account. You could be away from your computer when the market makes a major move. Your Internet connection could be down. 3

10. 6 Things Every Online Investor Should Know • Information is power. If you are going to buy and sell individual stocks online, it is your duty to keep as well informed as possible about what is going on with the company in question. 3

11. Security Tips • Protect your passwords for your online investment accounts. • Use anti-virus and anti-spyware software, and a firewall, and keep them up-to-date. • Avoid using public or other shared computers to access your financial accounts online 3

12. Security Tips • Don't believe everything you read in online newsletters, investing blogs, or bulletin boards. • Turn to unbiased sources when researching investments 3

13. Access • The Internet isn’t always available. Faulty servers, bad Internet connections, busy phone lines, natural disasters, peak-hour overload — all can get between you and your on-line firm. • Remember that your click of the mouse represents a request to execute a trade. • You are not directly connected to the stock market. All trades will be executed by your on-line firm’s brokers/dealers, presumably as quickly as possible. 3

14. Investing Online Two types of Online Trading services exist • Full-service brokerage • Online Trading service with the advice of a broker. • Merrill Lynch, Salomon Smith Barney, etc. provide Full-service brokerage trading. • Discount brokerage trading • -Investors make their own investment decisions without the advice of brokers. 3

15. Top Discount Brokers • Zecco: www.zecco.com • TradeKing: www.tradeking.com • eTrade: www.etrade.com • Scot Trade: www.scottrade.com • Sharebuilder (ING Direct) www.sharebuilder.com 3

16. Resources for Creating and Tracking Portfolios • Two best sites for creating and following a portfolio of stocks • Yahoo Finance: http://finance.yahoo.com • Google Finance: http://www.google.com/finance

17. Research – Company website • Find company website by searching on Google for company’s name in “quotation marks” (“Home Depot”). • At company web site, look for link to “Investor Relations” or “Investors”. • Download to read Annual Report, and annual 10-K SEC filing. • Read most current quarterly earnings reports. • Look for “Events & Presentations” to view speeches and powerpoints about company.

18. Research – Current News • Google News allows you to search for news stories on your companies, and also to set up news “alerts.” • Google News: http://news.google.com

19. Results Search on company name in quotation marks NEWS.GOOGLE.COM for any current news on companies you’re tracking

20. Results can be sorted by relevance, date or date with/without duplicates Sorted by relevance Sorted by date NEWS.GOOGLE.COM for any current news on companies you’re tracking

21. Waiting for a company to announce a earnings? Sign up for “news alerts” to be delivered once-a-day, once-a-week or as it happens NEWS.GOOGLE.COM for any current news on companies you’re tracking

22. Creative Commons License • Curriculum content created by Connect Your Community, a project of OneCommunity, funded by the federal Broadband Technology Opportunities Program. • This work is licensed under the Creative Commons Attribution 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by/3.0 15