Investors are bombarded everyday with really negative news about the economy and stock markets. The problems seem relentless and we seem nowhere near finding a solution.
While chicken little has certainly begun to cry, there has been some positive news over the past few months. The SEC has begun to clarify new regulations that actually mean a lot to investors. Essentially, the SEC has further paved the way to a level playing field for all investors. The SEC is preparing the ground work for companies to post impactful news directly to the web (see full report here) and in turn, make us into more powerful investors.
The problem
Most publicly traded firms disseminate corporate communications via wire services. While these antiquated businesses have made it easier for firms to comply with regulations for full disclosure, the truth is that they aren’t as fair as they claim. The wires in practice are do not publish simultaneously. Different websites, Bloomberg terminals, news services — all receive and post wires with differing speeds.
While the window has somewhat closed, this still means the big guys still get the info before the rest of us. In some cases, there are still minutes of trading time between when institutional investors receive their info and when the rest of investors do.
The solution and what it means for us
By posting info directly to a corporate website, companies actually are provided with a medium to provide the same information to everyone, at the same time. From here, a simple RSS push means everyone gets access to the companies reports at the same time.
When fully implemented, the velocity of information advantage a hedge fund or mutual fund manager would have over a retail investor with a high speed hookup and an online trading account is nullified.
While companies, for a variety of reasons, have been slow to adopt these procedures, they are beginning to get the picture in terms of 1) better compliance and 2) cheaper distribution costs. Combining further moves to level the playing field with the advent of expert investing communities and the ability to piggy back guru investors move for move, individual investors are experience a completely new level of power in making investment decisions.
