LETTER FROM THE EDITOR

Well, folks, the Microsoft story continues to bump along. I think to be fair they should pick a master that is approved by both sides in the case. If this person is a Mac-loving, Microsoft-hating independent, he is not good for our (the customers’) cause. We don’t know, but it would remove the doubt if he or someone was approved by both parties to the court action. The things he has said in his email about Microsoft would make me suspicious of his intent and of prejudice. Stay tuned.

There are millions of people now with accounts that allow them to trade stock over the Web with fees that range from $5 to $30 per trade. Schwab has over a million accounts alone. They charge a higher fee than start-up Web company Etrade, who has grown to be number two in the online trading business. If you look you will find dozens of companies vying for your business on the Web. Some provide a lot of research resources and cheap trades.

This is going to be one of the hot growth areas for 1998-99. This group of brokers will suffer a shake-out before too long, but it is easy now for people to follow and control their stock portfolios. In fact, a person can control his/her trades more closely today than a broker could just a few years ago.

The big brokerage houses let you trade online or over the phone, sometimes for the same price. Don’t forget the broker’s phone number in case your provider is down when you have to dump a ton of share later this year when the big correction comes. I see the Achilles heel of the online stock swap for the control freak to be the providers combined with the brokerage houses’ ability to keep up at the maximums, which are the very times you are desperate to do something.

For those 10 million or so of you who are on AOL, remember that you can track your portfolio, or you can track the ones you would buy if you had that spare million dollars to play with. My imaginary portfolio "cranks" while my real one languishes.

As any investment advisor will tell you, you may not want to watch your money on a minute-by-minute basis. Panic can set in as your value drops on any given day. On average the value will go up again but it can give you a sinking feeling when you lose more money in the market than you made working all day, and it may have happened in just a few moments. The typical advisor will tell you that income averaging says you should buy more of these cheap shares. I say don’t look and you’ll live longer. What you should use online trading for is to play with some small part of your investments, or set aside a small amount to play with and see if you should have a seat on the New York Stock Exchange. If you lose all your money you won’t feel so bad, and if you win you can have some bragging rights when you get together with your friends for a little discussion about investment knowledge.

There are Web sites that will help you on any level of market activity. For example, today I was told about a new service called PowerOptions for investors who "write covered calls." You may not need that kind help, and it might be better if you stay away from it, but it’s all out there.

So! Jump in and have some fun but don’t risk your whole nest egg.

—Don