Anonymous asked in Business & FinanceInvesting · 4 weeks ago

before the internet,,,did nearly as many people invest in and trade stocks like they did afterwards? how has changed the number investing?

and is this maybe what happened to the dot com many people were putting money into the stock market via their computers because it was just soo easy? like playing the lottery?



2 Answers

  • Anonymous
    4 weeks ago
    Favorite Answer

    No, not as many.

    But the IRA was founded in 1974.  And the 401k was founded in 1979 which increased the numbers of investors as it was done automatically through payroll deduction.

    Mutual funds were also becoming popular at the same time.   It was pretty easy to invest in a mutual fund without the internet.   You just wrote a check and sent it in with a deposit slip. 

    It did not require carrier pigeon.  :-)

    Back in the day, it was pretty standard for people to get an employer funded pension when they retired.  Before the internet it was becoming obvious that this was changing and that people would have to help fund their own retirement.  

    I don't think the internet necessarily was the main reason individuals started investing.   It was the realization that they weren't going to get a pension and that's why the government was giving them tax incentives to invest in retirement plans.

    As far as 20-somethings thinking they can be successful day-traders....yes, that's all internet.   I don't remember discount brokerages being a thing until the early 90s or so.  Before that each trade had to go through a full-service broker and it would have been cost prohibitive for the kids.

    Remember, it took the internet awhile to evolve.   Not everyone had it at first, and when individuals started getting it in their homes, it was dial-up through one's land-line phone.   It was awhile before high-speed cable or dsl, wireless, smart phones, etc.

  • 4 weeks ago

    You could use the internet to search for actual numbers on volume and possibly even number of investors.  Before the internet, people had to call their brokers and request a trade.  You checked stock prices in the paper which came out daily.  People actually talked and discussed business directly more.

    In general, yes, a lot less people invested pre-internet.  Then you had a lot more speculators instead of investors.  That helped drive artificial price increases and eventual sell off.  Many other factors, but this contributed.

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