Survey on the Impact of
the World Wide Web on Individual Investors and Electronic Stock
Trading
Updated Dec. 26, 1997
Survey Objectives
- Follow-up to the original survey done in
August 1996.
- Determine any demographic patterns in the
usage of Internet technology by individual investors.
- Identify any trends and preferences in
the types of services and tools used by Internet-savvy investors.
- Discover the benefits sought and main reasons
why investors use the Internet.
- Evaluate the general sentiments about the
relative popularity and future of Internet based stock trading
and digital exchanges.
- Identify some of the concerns about using
the Internet.
Highlights of 1st survey
Findings from 1st survey
- The main reason people use the World Wide
Web is for convenience. The biggest concern users have is security.
- The majority of Internet users have been
trading for a long time. They are experienced traders, not novices.
Most investors use the Internet for information and research,
but still rely on brokers to execute their trades.
- Most users only use services that are free
of charge. Women appear to be more willing to pay for Internet
services compared to men.
- Many people expressed interest in electronic
trading, but few actually do because of perceived security problems.
- Digital stock exchanges may be ahead of
its time.
Scope of 2nd Survey
- Survey time: January 1, 1997 to March 15,
1997 (10 weeks)
- Audience: Newsgroups, e-mail & web-postings
- Total queries: 1200+
- Total responses: 174
Scope of 3rd Survey
- Survey time: March 16, 1997 to Dec 24,
1997 (40 weeks)
- Audience: Web-postings and links predominantly
- Total queries: 4000+
- Total responses: 166
Survey Data - Demographics
| Aug-96
| Mar-97
| Dec-97
|
| Sex
| | | |
| Male
| 87%
| 83%
| 86%
|
| Female
| 14%
| 17%
| 15%
|
| | |
|
| Age
| | | |
| Under 21
| 1% |
7% | 9%
|
| 21 - 30
| 24%
| 29%
| 28%
|
| 31 - 45
| 60%
| 41%
| 33%
|
| 46 - 55
| 12%
| 17%
| 20%
|
| 56 and up
| 3% |
6% | 11%
|
| | |
|
| Years Trading
| | | |
| 0 - 1
| 12%
| 21%
| 31%
|
| 1 - 3
| 19%
| 20%
| 13%
|
| 3 - 5
| 22%
| 11%
| 14%
|
| 5 - 10
| 14%
| 19%
| 13%
|
| More than 10
| 34%
| 29%
| 30%
|
Survey Data - Technology
Use
| Aug-96
| Mar-97
| Dec-97
|
| Phone Trades
| | |
|
| Yes
| 32%
| 37%
| 33%
|
| No |
68% |
63%
| 67%
|
| |
| |
| Modem Trades
| | |
|
| Yes
| 23%
| 22%
| 23%
|
| No |
77% |
78%
| 77%
|
| |
| |
| WWW Investment Related Applications
| |
| Yes
| 88%
| 85%
| 78%
|
| No |
12% |
15%
| 22%
|
Survey Data - Applications
| | Aug-96
| Mar-97
| Dec-97
|
| Real Time Quotes
| Never
| 54%
| 49%
| 43%
|
| Sometimes
| 17%
| 22%
| 29%
|
| Often
| 29%
| 29%
| 28%
|
| Delayed Quotes
| Never
| 14%
| 15%
| 26%
|
| Sometimes
| 14%
| 19%
| 20%
|
| Often
| 72%
| 66%
| 54%
|
| Portfolio Tracking
| Never
| 37%
| 25%
| 34%
|
| Sometimes
| 23%
| 21%
| 18%
|
| Often
| 40%
| 54%
| 49%
|
| Graphs & Charts
| Never
| 11%
| 24%
| 28%
|
| Sometimes
| 37%
| 20%
| 23%
|
| Often
| 52%
| 56%
| 49%
|
| Research
| Never
| 12%
| 13%
| 16%
|
| Sometimes
| 37%
| 32%
| 28%
|
| Often
| 51%
| 55%
| 56%
|
| Forums/Discussions
| Never
| 32%
| 59%
| 69%
|
| Sometimes
| 31%
| 26%
| 22%
|
| Often
| 37%
| 16%
| 9% |
| On-line trades
| Never
| 75%
| 61%
| 63%
|
| Sometimes
| 11%
| 32%
| 17%
|
| Often
| 14%
| 13%
| 21%
|
| News
| Never
| N/A
| 55%
| 61%
|
| Sometimes
| N/A
| 32%
| 26%
|
| Often
| N/A
| 13%
| 13%
|
Survey Data - Reasons for Use
| Aug-96
| Mar-97
| Dec-97
|
| Why use the WWW?
| | | |
| Timely data
| 82%
| 77%
| 72%
|
| Access News
| 82%
| 72%
| 78%
|
| Discussions
| 34%
| 17%
| 12%
|
| Convenient
| 86%
| 77%
| 71%
|
| Faster Execution
| 25%
| 28%
| 33%
|
| Fun
| 55%
| 49%
| 55%
|
| Free Services
| N/A
| 67%
| 64%
|
| | |
|
| Continue using WWW?
| | |
| Yes
| 95%
| 94%
| 91%
|
| No |
0% |
2% | 0%
|
| Don't Know
| 5%
| 4% |
10% |
| | |
|
| Made more money using WWW?
| | |
| Yes
| 42%
| 49%
| 47%
|
| No |
19% |
17% |
17% |
| Don't Know
| 40%
| 34%
| 37%
|
Survey Data - Preferences
| Aug-96
| Mar-97
| Dec-97
|
| Preferred Trading Method
| | |
| Full Service
| 25%
| 16%
| 11%
|
| Discount Broker
| 33%
| 25%
| 29%
|
| Phone (Automated)
| 9%
| 7% |
6% |
| Modem to Broker
| 12%
| 8% |
12% |
| WWW
| 22%
| 39%
| 41%
|
| Other
| N/A
| 5% |
2% |
| | |
|
| Preferred Source of Information
| | |
| Trad. Broker
| 15%
| 9% |
14% |
| Others
| 14%
| 15%
| 15%
|
| WWW
| 71%
| 76%
| 71%
|
Survey Data - Crystal Ball
| | Aug-96
| Mar-97
| Dec-97
|
| | |
| |
| Interested in on-line trading
| Yes
| 80%
| 85%
| 83%
|
| on Digital Stock Exchanges
| No
| 4% |
4% | 5%
|
| Don't Know
| 16%
| 11%
| 12%
|
| | |
| |
| Will the electronic trading
| Yes
| 60%
| 69%
| 66%
|
| become more popular
| No
| 23%
| 15%
| 14%
|
| than traditional brokers?
| Don't Know
| 18%
| 16%
| 20%
|
| | |
| |
| Will digital stock exchanges
| Yes
| 46%
| 50%
| 48%
|
| become more popular than
| No
| 27%
| 19%
| 17%
|
| traditional stock markets?
| Don't Know
| 27%
| 31%
| 35%
|
Findings from 2nd survey
- There are more newbies to Electronic trading
- Real-time Quotes are replacing Delayed
Quotes in popularity
- Users perceive that they are making more
money using the WWW
- People are moving away from time-intensive
discussion group such as e-mail, forums and newsgroups
- Convenience and time are still the top
reasons for use, but the biggest increase is in the need for speed
to the feed
- Full-service brokers need to protect their
positions by offering different services to differentiate themselves.
Findings from 3rd survey
- The number of users under 30 or above 45
appear to be growing faster than users in the 31 - 45 age group.
- More new traders (less than 1 year) are
using the Internet compared to more experienced investors
- The use of telephone or modem trading programs
has been consistent in the last 16 months.
- The use of Real-time Quotes appears to
have increased slightly, while the use of Delayed Quotes has declined.
- The three major reasons why investors use
the Internet are still the same: Timeliness of Data, Access to
News and Convenience.
- About half the survey participants believe
that they are making more money using the WWW.
- People are continuing to move away from
time-intensive applications such as e-mail, forums and newsgroups.
Do you have a comment about the Internet
and Stock Trading to share with others? Add it on the Writing on the Wall,
added on October 22, 1997.
Number of Accesses since April 27, 1997: 
Stan's Home Page
Created: April 27, 1997.
Updated: January 5, 1998.