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Hmmm... I seem to be having some trouble filling in the blanks. Perhaps I've lost my capacity for reason. Maybe I'm so blind to the potential nightmare represented by online brokerages that I've lost all sense of perspective. Can it really be that I've blundered into a debate where there is no credible argument to be made against my position? Is victory on the Field of Feuding Fools really going to come to me so easily?
I sense a trap. Maybe I should run a white flag up the Dueling Fools Flagpole and give up right away, before somebody (namely, me) gets hurt.
On the other hand... maybe appearances are as they seem. Maybe I'm right. Maybe the advantages of managing your investments through an online broker are so screamingly obvious that this match is going to be a slam-dunk victory for Yours Truly. But I'll advance my case anyway, just to keep everything pro forma and hunky-dory.
So, first thing, Rick, here's what you do. I want you to pick up your telephone and look at it very closely. Look at all the little buttons with the numbers and letters on them, then look at that big ol' earpiece part, and the big' ol' mouthpiece part, and everything else about it. Now, ask yourself: What's wrong with this picture?
Easy, Rick. What's wrong with this picture is that there... is... no... picture!
In fact, you'll find that there isn't even a screen on this gadget. No data display. No graphical representation of information. Instead of the flood of material available to you via the Internet, a telephone can only feed you the information you need one datum at a time. So maybe you fill your bathtub with an eyedropper, and maybe you pop your popcorn one kernel at a time. But that's no way to run a stock portfolio.
I draw your attention to this quaint 19th century telephone gadget because if you're not online, this is the device you'll be using to manage your stock portfolio. As it is, today's modern investors already rely on the Internet as the single best place to conduct the greater part of their investment research. Whether you're studying the financial statements available at no cost at freeedgar.com, or visiting the investor relations information maintained by many companies at their websites, or simply exchanging ideas about stocks on our Motley Fool Discussion Boards, being online has become a natural habitat for investors. There's good reason for that: As a tool for the dissemination of information, the Internet is simply unparalleled. No other method devised by humans comes close to matching it. And online brokers add to the resources available to the investor, resources that would be simply impossible to deliver via telephone.
A typical online broker will be able to show you the status of your entire portfolio -- what you own, the price you paid for it, and what it's worth now. Online, you're able to examine your entire trade history with a couple of clicks. You can check the status of your orders after you've placed them, check real-time quotes, and do any number of other operations, all of them without having to touch-tone your way through one of those pesky phone mazes, or waiting on hold until a real person decides he'd like to interrupt his coffee break long enough to give you some attention. Why an investor wouldn't want the sort of capacity for command and control an online broker can provide is beyond me.
Unless, of course, there was a question of cost.
Oops. I shouldn't have mentioned cost. Because this is the point in the argument where things really get unfair for you, Rick. That's because, thanks to the relentless advance of technology, using an online broker is one of those few magical realms where you actually pay much less and get much, much more. Online, you get all the service you expect from a traditional offline discount broker, plus all the advantages I've listed above. If you've been investing for more than a few years, you know that not all that long ago the thought of a trade for anything less than $50, even from a discounter, would have been a laughable proposition. These days, a deep discounter can drop that price by something on the order of 90%. You might want to pay a little more for extra services, but even then the savings are substantial when you get your portfolio wired. And lest anyone forget, the whole point of this investing thing is to make and keep money. Right?
So, for cost and convenience alone, online brokers win hands down. But that's not the thing I like most about using an online broker. Most important to me is that investing online puts you in the prime position to behave very Foolishly.
It's not just that The Motley Fool is a creature of cyberspace, although my affection for our little website shouldn't be discounted entirely. My point is that when you use an online broker, and jettison all the trappings and paraphernalia of the old way of trading, there is no longer any ambiguity about who is in charge of your investment decisions. There is no longer any question of who is in command. No one making your choices for you; there is no broker or analyst to blame for the stock that went down or for the investment you didn't research sufficiently. You are the one who orders the trade; there is no intermediary acting on your behalf. At last the responsibility for your investment future falls squarely where it belongs: on your own shoulders. I think any real Fool would find that power invigorating.
Obviously, anyone who does not yet have an account with an online broker is running at full speed toward our Discount Brokerage Center to begin comparing the various online brokers right away. Yes?
You've got a tough case to make, Rick, since almost all the people reading this are already online and know something about how powerfully compelling this place can be. It won't be easy persuading them otherwise. Good luck.
This Week's Duel
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