TRADING: There is ready supply of information in newspapers, magazines, TV and the Web Hundreds of websites and chatrooms offering to fill the knowledge gap are but a click of the mouse away, but there is generally no method of judging how worthy or unbiased they are, writes Una McCaffrey.
JUST as in many other parts of life, much of the thrill in share trading comes in the chase. Information has to be gathered on stocks, new share issues must be closely considered and market movements must be watched before decisions to buy or sell can be made. Keeping up to date with research is key to successfully managing even the smallest portfolio.
Tapping into market information is simple, thanks to the ready supply of research to be found in newspapers, magazines, on television and, of course, the internet.
This surplus of information brings its problems too, however. Not even the most hardened market-watcher or tipster gets it right every single time, so all trading recommendations should be considered with care. Likewise, market discussions, especially those conducted in online chatrooms, should be taken with a large pinch of salt. At the basis of it all, the adage of not putting all your eggs in one basket represents wise advice, unless you can afford to lose your shirt when it goes wrong.
Starting with the basics, share price information is widely available. The internet shows its true benefit here, offering real-time prices, which are updated at fixed intervals during the day. The Irish Stock Exchange site (www.ise .ie)updates its prices four times during daily trading, for example, while the New York Stock Exchange (www.nyse.com) does so every 20 minutes. The London Stock Exchange (www.londonstockexchange.com) and the Nasdaq (www.nasdaq.com) provide the same service, with varying levels of additional information on offer too.
This can include historical data on how individual stocks have performed over the year, or dividend history, among other things. Official statistical information is, by its very nature, completely unbiased and thus completely reliable.
The appeal of this consistency must be balanced against a lack of commentary however: all the figures in the world will be useless without some background on the stock in question.
It is at this point that information overload threatens. Hundreds of websites and chatrooms offering to fill the knowledge gap are but a click of the mouse away, but there is generally no method of judging how worthy or unbiased they are. Unfounded rumours of price-boosting acquisitions or hostile takeovers are often started in chatrooms in particular. Of the few sites that do stand out from the rabble, , www.fool.co.uk, (The Motley Fool) or www.redherring.com, the site attached to investor magazine Red Herring, have a no-nonsense approach.
While tips displayed on these sites may deserve a little more credence than those discussed in unofficial chatrooms, the usual "buyer beware" still applies.
Market commentary is also available in newspapers and, in general, should be unbiased. Quality daily newspapers usually publish a list of the previous day's closing prices on local markets, accompanied by comment on significant movers on the major global indices and stories on events that may influence future developments. More financially-oriented newspapers, such as the Financial Times or the Wall Street Journal, tend to contain more markets stories than general dailies but, for the novice investor, a national newspaper or magazine will probably fit the bill just as well.
If you do plan to invest close to home, other good sources of market information are the websites maintained by local stockbrokers. Goodbody Stockbrokers (www.goodbody.ie), Davy Stockbrokers (www.davy.ie) and NCB (www.ncb.ie) all post a range of useful resources on their sites, such as share tips and sector or company-specific research. The offerings differ according to broker, with NCB making a particular effort to educate new investors for example, and Goodbody pushing its mobile markets service, whereby anyone can register to receive free text messages containing personally selected share prices at fixed intervals throughout the day.
Again, the hard data will be completely reliable, while all tips should be treated with informed care.
