The selection of an appropriate software package can have a significant impact on the overall success of a small investor. The purpose of this paper is to evaluate the cost-effectiveness of ten financial planning software packages for individual investors. Details of these programs and information concerning their manufacturers are provided in Appendix A.
Typically, investment software has been organized into three general categories: tracking; trading; and selection or screening. Tracking involves the process of charting specific investments over time, trading consists of designing optimal portfolios, and screening entails sorting investment data based on a set of criteria. None of the examined packages incorporates all three categories. Instead, they tend to focus on either tracking and screening or tracking and trading. This made direct comparisons between the software more difficult.
Comparisons were based on the following attributes: user interface, charting capabilities, program manual/tutorial, research capabilities, output features, data input, customization, and comprehensive value. Each attribute was weighted in importance as shown in Table 1. These evaluations were performed on either a full-featured program or a demonstration program which highlighted the pertinent features and characteristics. User manuals were evaluated based on the presence of hardcopy support literature, ease of use, troubleshooting index, and examples. Each financial package was assessed by three evaluators and the average of the scores was used in the analysis.
The output features were assessed in terms of the extent of graphical and table data presentation. The level of customization was measured in terms of the user’s ability to modify the standard screens, charts and reports. The research capability was judged in terms of the user’s ability to modify the data set using formulated decision criteria and to interpret specific trends and indicators. This interpretation capability represents an important framework for helping the user gain a better understanding of market fundamentals. The data input feature was assessed primarily on the sophistication of the data file transfer process. The comprehensive value was defined as the program’s overall technical coverage and effectiveness.
The results show that the Windows On Wall Street program has the highest weighted score of 4.8. This is not surprising since it showed excellent performance in all evaluation categories. Wall Street Analyst was second with a score of 4.5 and AIQ was third at 4.3. There is very little difference in the weighted scores of the top rated programs. Also, the first two programs focus on tracking and screening while the third emphasizes tracking and trading. In cases where the ratings are close, costs can be a deciding factor.
Table 2 shows a benefit-cost analysis based on the initial cost of the program and the estimated annual online charges. These results show that the Reuters Money Network program emerges with the largest benefit-cost ratio with Wall Street Analyst in second place. These ratios can be somewhat misleading since the online charges can vary considerably depending on use. In many cases, the annual online charge can exceed the initial cost for the software.
Conclusions
This study revealed the following:
- Windows on Wall Street (Tracking and screening) package is the top ranked program.
- Reuters (Tracking and screening) program has the best benefit-cost ratio.
- >Windows on Wall Street, Wall Street Analyst, and Reuters are all on or near the efficient frontier.
- Online charges can exceed the initial cost of the financial software.
- The top-ranked programs are very user-friendly and are easy to learn.
The current inventory of financial planning software can assist the individual investor in improving his/her performance in the market. Additionally, software packages like the ones examined in this study can be used by the employer as training systems for both employees and retirees in designing their own financial investment plan. Obviously, both the initial cost as well as the recurring online charges must be taken into account before deciding whether to purchase a financial planning system.
Several of the relatively low-cost systems identified in this paper, e.g., Reuters, may serve as a starting point. Corporations may wish to consider purchasing one or more of the investment planning packages for use by employees and retirees. This could include the establishment of financial investment clubs where the company helps underwrite the online data transfer charges.
The capabilities of stand-alone investment software will continue to grow over the next several years. In many ways, they will serve as a bridge to virtual financial software support via the Internet. Here, the individual investor will be able to access a wide range of software support tools, data bases, and online technical support on an as-needed basis.
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Financial Services Software Specifications
1) Analyzer (Ver 1.2) & Prosearch (Ver 5.0) – (800) 324-8246
Telescan, 10550 Richmond Avenue, Suite 250, Houston, TX 7704
COST: $295 plus $50/mo.
BASIC FEATURES: Tracking and screening (60% to 70% of program useful)
EVALUATION VERSION: Demonstration program
USER INTERFACE: Windows
USER MANUAL/TUTORIAL: Convenient, easy to assimilate
DATA INPUT: Built-in downloading features & database compatible
COMPUTATIONAL SUPPORT: Limited analytical features (Algebraic)
OVERALL ASSESSMENT: Good
WEB SITE: https://gbr.pepperdine.edu/981/ (no longer accessible)
2) Meta Stock (V 6.5) – (800) 882-3040
Equis International, 3950 S. 700 E, Suite 100, Salt Lake, UT 84107
COST: $349 plus $20/mo.
BASIC FEATURES: Tracking and screening (60 to 70% of program useful)
EVALUATION VERSION: Demonstration program
USER INTERFACE: Pull down menus
USER MANUAL/TUTORIAL: Convenient, easy to assimilate
DATA INPUT: Built-in downloading features & database compatible
COMPUTATIONAL SUPPORT: Limited analytical features (Algebraic)
OVERALL ASSESSMENT: Good
WEB SITE: www.equis.com
3) Fundmaster – (508) 663-3330
FundVest, Inc., 337 Boston Road, Billerica, MA 01821
COST: $295 plus $20/mo.
BASIC FEATURES: Tracking and trading which includes testing trading strategies
EVALUATION VERSION: Full feature program
USER INTERFACE: DOS with keystroke commands
USER MANUAL/TUTORIAL: Inconvenient; difficult to assimilate
DATA INPUT: Built-in downloading features & database compatible
COMPUTATIONAL SUPPORT: Portfolio Optimize used to help identify trends based on historical price data (Inferential)
OVERALL ASSESSMENT: Poor
4) Captool Professional Investor (Ver 5.1) – (800) 826-8082
Techserve, P.O. Box 9, Issaquah WA 98027
COST: $499 plus $20/mo.
BASIC FEATURES: Tracking and trading helps to identify asset class performance. Updates on latest tax laws
EVALUATION VERSION: Demo disk
USER INTERFACE: DOS with pull down menu bars
USER MANUAL/TUTORIAL: Convenient, easy to assimilate
DATA INPUT: File transfer. Compatible with online databases
COMPUTATIONAL SUPPORT: Optimizes a portfolio based on financial position of investor
using Sharpe ratios and Markowitz model
OVERALL ASSESSMENT: Good
WEB SITE: www.captools.com
5) AIQ Trading Expert (Ver 4.0 ) – (702) 831-2999
AIQ, Inc., Box 7530, Incline Village, NV 89452
COST: $695 plus $50/mo.
BASIC FEATURES: Tracking and trading (70% useful, 30% very advanced)
EVALUATION VERSION: Full feature program
USER INTERFACE: Windows
USER MANUAL/TUTORIAL: Convenient, easy to assimilate
DATA INPUT: Built-in downloading features & database compatible
COMPUTATIONAL SUPPORT: Charting and analysis capabilities (Inferential)
OVERALL ASSESSMENT: Good
WEB SITE: aiq.com
6) RAMCAP (Optimizer) – (800) 480-3888
Wilson Associates International, 7535 East Hampden Ave, Suite 101, Denver, CO 80231
COST: $595 plus $100 per quarter or $399 per year
BASIC FEATURES: Tracking and trading
EVALUATION VERSION: Demo disk
USER INTERFACE: Windows
USER MANUAL/TUTORIAL: Convenient, easy to assimilate
DATA INPUT: File transfer. Updates provided through subscription
COMPUTATIONAL SUPPORT: Optimizes a portfolio based on financial position of investor using Sharpe ratios and Markowitz model
OVERALL ASSESSMENT: Fair
7) Windows on Wall Street (Ver 5.0) – (972) 235-9594
MarketArts, Inc., P.O. Box 850992 Richardson, TX 75855
COST: $130 plus $20/mo.
BASIC FEATURES: Tracking and screening (80 to 90% of this program useful)
EVALUATION VERSION: Full feature program
USER INTERFACE: Windows
USER MANUAL/TUTORIAL: Convenient, easy to assimilate
DATA INPUT: Built-in downloading features & database compatible
COMPUTATIONAL SUPPORT: Excellent charting and analysis capabilities
OVERALL ASSESSMENT: Good
WEB SITE: www.wallstreet.net (no longer accessible)
8) Principia for Mutual Funds – (312) 424-4288
Morningstar, Inc., 225 W. Wacker Dr. Chicago, IL 60606
COST: $495/year with monthly updates via CD
BASIC FEATURES: Screening which utilizes comprehensive mutual fund database
EVALUATION VERSION: Full feature program
USER INTERFACE: Windows
USER MANUAL/TUTORIAL: Convenient; easy to assimilate
DATA INPUT: Data base & updates provided through subscription
COMPUTATIONAL SUPPORT: Criteria based screening process (Descriptive stats)
OVERALL ASSESSMENT: Fair
WEB SITE: https://gbr.pepperdine.edu/981/ (no longer accessible)
9) Reuters Money Network (v2.5) – (800) 521-2471
Reality online, 2200 Renaissance Blvd., King of Prussia, PA 19406
COST: $20 plus $20/mo.
BASIC FEATURES: Tracking and screening (60% to 70% of program useful)
EVALUATION VERSION: Full feature program
USER INTERFACE: Windows
USER MANUAL/TUTORIAL: Convenient, easy to assimilate
DATA INPUT: Built-in downloading features & database compatible
COMPUTATIONAL SUPPORT: Limited analytical features
OVERALL ASSESSMENT: Fair
WEB SITE: https://gbr.pepperdine.edu/981/ (no longer accessible)
10) Wall Street Analyst (Ver 3.0) – (800) 556-2022
9200 Sunset Drive, Miami, Fl 33173
COST: $70 plus $20/mo.
BASIC FEATURES: Tracking and screening using candlesticks & tick bar charts
EVALUATION VERSION: Full Feature Program
USER INTERFACE: Windows
USER MANUAL/TUTORIAL: Two in-depth manuals but no tutorials or indexes
DATA INPUT: Built-in downloading features & database compatible
COMPUTATIONAL SUPPORT: Provides standard statistical measures and calculates moving averages, momentum, volatility and related indicators
OVERALL ASSESSMENT: Good
WEB SITE: https://gbr.pepperdine.edu/981/ (no longer accessible)
