900 N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 ·
215.563.0276 ·
Fax: 856.667.3652
The Online Advisor - March 1999
Are Internet stocks too hot?
Alan Greenspan, the Federal Reserve Chairman, compared the current frenzy over Internet stocks to a lottery. There will be a few big winners and a lot of losers.
If you can't resist investing in some of the new Internet companies, at least consider these investment facts.
1. If it looks too good to be true, it probably is. The hot stock tips on Web sites and on-line newsletters are not necessarily based on sound financial information. Check "facts" carefully before you invest.
2. The Internet is likely to thrive, but most Internet companies won't. Revolutionary technologies create successful businesses, it's true. But consider the automobile. In 1900, there were about 100 car companies. How many of them survived? Think about that before buying stock in an Internet start-up.
3. Don't speculate with money you'll need for college educations, retirement, or other important things. If you invest in today's hot Internet stocks, do it with money you can afford to lose. Or at least spread your risk by investing through mutual funds or some other plan of diversification.