By Jerry Thomas (TMF Cheeze)
April 26, 2000

Rick, Rick, you poor, poor Fool. You must be absolutely distraught. Worried sick about all the people out there who just bought a set of Ginsu Knives and are in danger of being transformed into crazed, hatchet-wielding maniacs. Then there's the guy who was just given a Zippo Lighter for his birthday -- obviously he's going to end up on the FBI's Ten Most Wanted List for starting arson fires in 12 states. I'm afraid I have to admit it -- I've been known to eat half a package of Oreo cookies in one sitting just because they were there, and because a certain TMF Edible wasn't around to hold me back from overindulging in a product just because it was possible. People who buy running shoes inevitably collapse from jogging 30 miles without stopping. People who eat Cocoa Puffs inevitably all go cuckoo.

There's just no avoiding it, right? We'd better do something, and quickly, or somebody somewhere just might make the mistake of buying something useful or convenient.

I know your heart is in the right place, Rick. Of course, nobody wants to see anybody behave recklessly with their money -- and anybody who dives headlong into online trading (or any kind of short-term speculation, for that matter) without being aware of the risks is asking for trouble. Frankly, they're asking for trouble even if they do understand the risks. But last time I checked, we weren't arguing the merits of playing the stock markets like a casino. The question under consideration is whether online brokers represent an advantage to the individual investor. And clearly they do.

Thing is, a person who has always been careful with his or her money is not going to change into some kind of riverboat gambler merely because they open an account with any of the many online brokers that are ready to take on their business. If you've been a sober, careful investor all your life, you're not going to suddenly start trading naked puts just because you're accessing your portfolio with a modem instead of a telephone. On the contrary, the tools that these online brokers offer you will serve to enhance your ability to make sound investment decisions. More information, more functionality, and more opportunity to exercise command over your portfolio are good things. Oh, and that money you save on commissions isn't bad either -- even for those of us who only make a handful of trades per year.

Online brokers offer good services at prices that are more than competitive -- they are truly transforming the industry. With the services available, and the money investors stand to save, it's hard to make a case that responsible investors shouldn't consider using an online broker to manage their accounts.

There is little need for me to belabor the point. In my opinion, online brokerages mesh well with good Foolish principles. They represent one more example of how the Internet is flattening hierarchies, shifting power away from the centralized focus of Wall Street, and putting new tools into the hands of individual investors everywhere. This Fool likes the sound of that.

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