From the perspective of individual investors, what impact does the internet have on stock market trading?

Abstract

There have been various technological advances which have greatly impacted the stock market. The internet can now be considered a highly important tool, influential in many aspects of life. However, there is a scarcity of literature regarding the impact of the internet on stock market trading. As such, this project aimed to gain an understanding of the impact that the internet has on stock market trading, for individual investors. Specifically, this focused on identifying how important the internet is in stock market trading to individual investors, the perceived advantages and disadvantages of the use of online trading, the internet’s impact on research, and finally to understand if it is believed that it would still be possible to be profitable in the stock market today, without the use of the internet. 10 semi structured interviews were conducted with industry experts, selected through purposive sampling, in order to ensure they had the sufficient knowledge and experience required to provide ample data. This data was analysed, in correlation with previous literature wherever possible. The results from this research was able to show that both cost and ease of access can be considered as important advantages of online trading. However, it was also identified that online trading has allowed less experienced individual investors to participate within the stock market, potentially putting themselves at risk. Furthermore, the internet was found to be vastly important within research for the majority of individuals. Finally, the findings of this study were able to show that the internet is of large importance for individual investors within stock market trading, but it is not essential, as respondents stated they believed that it would in fact be possible to remain profitable within the stock market today, without the use of the internet. This study finishes by providing recommendations for future research within the topic.