A Beginner's Guide To Investing In Shares: Line up with the pros

Time is money on the markets so use the internet, says Magnus Grimond

IT IS not an exaggeration to say that the home computer and the internet have revolutionised private investment. In the past the professionals ran rings round the amateurs by virtue of their proximity to the action. Major news items like profit warnings, takeovers or big contracts that send share prices soaring or plunging can make pots of money for the people in a position to deal immediately. The rest of us were left to catch the crumbs when we picked up the newspapers the next day.

Nowadays, armed with an internet connection and a telephone dealing service, the private investor has much the same access to (legitimate) stock market information as the professional. Whether he needs the ensuing snowstorm of data is another matter.

Certainly some of the stuff available on the internet is first class. As well as up-to-date share prices - fast becoming a commodity on the internet - the MoneyWorld website provides access to everything from the performance history of unit trusts provided by Reuters Funds to annuities information and a personal tax calculator developed with Price Waterhouse.

Interactive Investor is a potent competitor in this market. The website does not have the breadth of coverage of MoneyWorld, but offers some excellent rival analysis and news services, including Financial Times and Moneywise magazines.

Unit trust comparisons are provided by the respected Standard & Poor's Micropal and investment trust statistics by NatWest Securities (soon to become Bankers Trust). Although the information can be up to a month or more out of date, these databases are a valuable resource for private investors.

Much of the information on the internet is free, apart from the cost of the telephone calls, and it is often very useful. S&P Micropal, for instance, will give you a graph of the unit price, the date the fund was launched and information about the manager. TrustNet does the same sort of thing for investment trusts.

The standard criticism of the internet is the time and general aggravation expended in navigating it, and it must be said that this remains valid. Call me an old Luddite, but I prefer to pick up a book like the old Hambro Company Guide, now published by Hemmington Scott, than sit drumming my fingers while I log on to the net, find the publisher's website and then search for the information I want.

Even so, no serious private investor can afford to ignore the internet. Some information is just not available elsewhere. Take the AAA Investment Guide, written by David Lewis, a former financial journalist. It is a sort of constantly updated investment manual, and it is only available on the internet.

But for the stock market buff the real added value lies in the plethora of electronically-propagated market-related intelligence and software linked to the internet. At perhaps the most basic level, Microsoft's Money program is already providing an introduction to investment software for many people. Money 98, launched last November, at least has the virtue of cheapness, costing anything between pounds 22 and pounds 50.

But the more adventurous and confident will quickly want to graduate to something more sophisticated. They are unlikely to be disappointed. At the Rolls-Royce end of the spectrum is Market-Eye, produced by Data- stream/ICV, which supplies professional investors. As well as instant and continually-updated share prices, this will give you company results and edited regulatory news as it happens, just like grown-ups in the City. However, the system has to be set up to work through a television aerial, and at between pounds 1,000 and pounds 1,500 a year, it is not cheap.

Anyone who likes the idea of constantly updated prices without this sort of cost could take a look at Prestel's cut-down version of Market-Eye. But in fact most investors do not need this level of proximity to the market. internet-based share quotation services are now plentiful and many of them are free. The Financial Times not only provides 20-minute delayed share prices from its site, but offers the ability to set up your own permanently updateable portfolio for nothing.

If you are worried that maintaining your portfolio on the internet could allow every Tom, Dick and Hacker to take a peek, you need an updating service. For pounds 5 a month, Electronic Share Information's bronze service will give you delayed share prices. The company claims more than 150,000 registered users, nearly half of whom pay nothing. There are myriad software programs around for manipulating the data once you have downloaded it, most of them too technical and advanced for the novice investor. However, one which provides an elegant combination of simplicity, its own download facility and compatibility with Windows 95 is ShareScope. For pounds 79.95 down and pounds 9.95 for the continuing data supply, it is also reasonably cheap.

Dealing by internet remains the private investor's Holy Grail. Robert O'Riordan of Brewin Dolphin's Stocktrade, one of the pioneers of trading on the web, reckons there could be 50,000 on-line brokerage accounts in the UK by 2003.

In time, these increasingly powerful electronic market tools will seriously undermine the traditional role of the private client stockbroker. If that puts renewed emphasis on the need for the professional to make top-quality advice and research available to all then it can only be a good thing.