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The Internet and the Share market
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By Bernice Ly
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The Internet and Information Technology in contemporary Westernsociety have played a pivotal role in advancing the pace ofhumanity, and assisting with lifestyle needs. However, it isclearly demonstrated with business investments such as the sharemarket that the Internet has become a tool to assist the growthof investments and businesses as well. There are many ways inwhich the Internet has assisted in promoting the share marketand also in educating people on how to invest their moneywisely. For example, although many academics would argue thatthe Internet only provides information that is biased towardscorporations that are listed on the share market, others wouldargue that the Internet is only biased to a limited extent asclients of the share market also have the power to write abouttheir experiences and teach people about wise investing.
The Internet has provided access for companies such as Park LaneInformation Technology to advertise their expertise on theInternet in order to promote the share market as well asincreasing their public relations skills in the area. Forexample, by Park Lane Information being able to have theopportunity to advertise their services on the Internet, clientscan be assisted in areas such as advertising and education aboutshare market software available on the Internet, 24 hour clientsupport, as well as providing an open information environment.Also, The Internet has played a pivotal role in the popularityof the share market. Citizens in Western developing nations areoften encouraged by the Internet to take risks in the sharemarket due to online advertising and extensive tutorials onwebsites showing potential customers how to utilize the sharemarket effectively.
There are numerous incidences where the News that is broadcastedon the Internet will have an effect on the international sharemarket. "The Asian Financial crisis that was started in Thailandin 1997 heavily affected the share market." (Wikipedia, 2005, p:1). Many people argued that the Internet played an importantrole in the Asian Financial crisis because of the research thathad enabled the entrepreneurs to keep track of the share market.For example, "Early May (1997) - Japan hints that it might raiseinterest rates to defend the yen. The threat never materializes,but it shifts the perceptions of global investors who begin tosell Southeast Asian currencies, and sets off a tumble both incurrencies and local stock markets." (CRS Report, 1998 p: 2).Though the Internet is not directly responsible for the AsianFinancial Crisis situation, it is responsible in some respectdue to large media coverage as the Internet is a popular mediumfor the media.
However, Internet also plays a very exciting role in terms of anentrepreneur being able to keep track of their own shares, whichwill enable them to play a vital role of making financialdecisions. As taught by Adam Smith and his theories of supplyand demand, nations that have been dominated by Western cultureoperate on a want and needs basis, which then affects the supplyand demand curve. Hence, the Internet is a place where consumerscan place their demands, in order to receive the supply. Inrelating this to the share market it can be viewed that fast andreliable information has provided a situation where shareholdersare now able to make decisions in regards to their shares justby gaining access to the information based on Internet research,or information sent to them in an email by their representativesor share companies.
Finally, the information that is gained on the Internet cansometimes be biased and aimed at promoting the company's publicrelations and advertising, as opposed to assisting in thedecision making process of the shareholders. However, theadvantage of the Internet is that it is a free environment whereconsumers who are involved in the share market are also able tochoose whether or not they will publish their experiences to thepublic. The future of the welfare of each society is dependentupon how well they adapt to globalization and culturalhomogenization, hence the Internet can be used as a tool forachieving this goal for people who want to participate in acapitalist society.
References:
Paul Blustein, The Chastening: Inside the Crisis that Rocked theGlobal Financial System and Humbled the IMF Public Affairs
Michael Pettis, The Volatility Machine: Emerging Economies andthe Threat of Financial Collapse
Summary: The Internet now plays a strong role in the world offinance. It is clearly demonstrated with business investmentssuch as the share market that the Internet has become a tool toassist the growth of investments and businesses.
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