Investment Software
Helping individuals invest like pros
It used to be that if you wanted to play the stock market, you had to go through a professional trader or brokerage. The average citizen had neither the time nor the knowledge to make and monitor his or her own investments.
Today, however, the Internet has changed all that. With the help of the right investing software, individual investors can plan, monitor and change their own portfolios. Investment software is any software that allows users to track, trade, select and/or screen investments. Investments are anything people buy in order to make more money, such as property, stocks, bonds and mutual funds. When it comes to investment software, however, the investments are usually stocks. Stocks are shares of companies that are traded publicly on the stock market.
Stock market software has two basic functions: tracking and trading. Stock tracking software provides data about the performance of an investor's stocks and also screens the stock market for other potential investments within the given parameters (usually entered prior to running the software). Stock trading software takes the process one step further and allows the investor to actually buy and sell stocks via the program.
Many stock software applications also include option software. An option (or stock option) is a right to purchase a certain stock at a certain price at some point in the future (prior to an expiry date, of course). Generally, option trading software and stock trading software are one and the same.
Forex trading software is similar to stock trading software but for the foreign exchange rather than the stock exchange. The foreign exchange deals in currency instead of stocks; investors buy and sell foreign currency as opposed to shares in companies. However, like the stock market, the
Forex market changes minute-to-minute, so Forex software is necessary for an individual investor to make informed decisions.
Features and Benefits
The right investment software will help individual investors:
- Save time. Automation allows the software to scan stock market information quickly and highlight only what is relevant to the investor (as determined by the profile he or she enters into the program). This not only saves time but also reduces confusion.
- Understand the data. Many programs present information in charts and graphs, making it easier to understand the data at a glance.
- Create a plan. Every investor needs a trading system or strategy to direct their activities. Most investment software will guide the user through the creation of such a plan.
- Practice their skills. Once you've created a system, you'll want to know if it works before you put your money behind it. Many trading software packages include a simulator that allows you to practice playing the market with virtual money.
- Stay organized. With up-to-the-minute data and a variety of reporting features, investment software can keep you informed and ensure that you know your financial situation at any given moment. Many programs also include applications to help you file the appropriate paperwork with your tax return.
Top Choices
Popular investing software includes:
- Checklist Investor
- Wizetrade
- Wave59
- TradeStation
- AmiBroker
Major Considerations
Before you purchase investment software, ask yourself these questions:
- What do I need the software to do (trade, track, screen, select, all of the above)?
- How much investing knowledge and experience do I have? (Note: Some investing software requires a fairly sophisticated investor to use it properly. Make sure you find a package that suits your level, especially if you are a beginner.)
- What is my trading style (conservative, aggressive, etc.)?
- Where will I be using this system (desktop, laptop, PDA)?
In the end, the most important thing about any investment software is that you are comfortable using it. Many companies offer free trials of their software, so take full advantage of such offers to find the software that works best for you.
Price Range
Investment software isn't a one-time purchase. In order to continuously access market information, you will have to pay a fee (usually monthly, but sometimes quarterly or yearly). The initial investment can be anywhere from $70 to $700, with most packages falling somewhere between $300 and $500. Monthly fees are generally $20 to $50, but some companies offer a deal if you pay up front per quarter or for the year.
Beware of any investment software that promises to return your investment many times over by making you rich. No software package can make you millions of dollars. (If it could, do you really think they'd be selling it to you for a few hundred dollars?) Rather, investment software packages are tools that you can use to better understand the market and increase your investment savvy. Used properly, they can help you make wise investment decisions, which will earn you money, but you, the user, are an integral part of that success.
Summary
If you're looking to invest in the stock market or foreign exchange and you'd like to be the master of your own portfolio, investment software is certainly a wise investment. As with stocks, however, research is essential. There is an abundance of products with a wide variety of features, so take your time, compare a number of packages and use free trial offers to get a feel for what you want and need. And remember, no software is going to turn you into an expert day-trader, but the proper package, a little luck and good decision-making on your part may just make you enough to take early retirement.
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