It is no secret that institutional investors are far more successful than retail investors. So what is the key differentiator between the two that makes one usually a more successful investor than the other? Information or the lack thereof.
Institutional investors make informed investments. More importantly, they have access to this information that most retail investors simply cannot afford to have, given the size of their portfolios.
Organize information
This is where AlphaTrade steps in. AlphaTrade's mission is to organise the world's financial information and make it universally accessible and useful, according to Penny Perfect, promoter and Chief Executive Officer of the real-time news/information provider.
"Small investors benefit by having a product that is equal to the quality of the institutional traders. When you are trading stock it is imperative to have identical information that the professionals are using to trade with, otherwise you are at a distinct disadvantage. And you need to have this information presented in a manner that you can instantly understand," Perfect explained.
AlphaTrade has developed a user-friendly and cost-effective product called E-Gate that allows subscribers to access stock market information easily and at a fraction of the cost of competing products, she added.
"Price and terms of agreement are huge considerations for the retail investor as well. Our price is $17 (Dh62.3) per month plus any applicable exchange fees (this varies with every individual). And we have no agreements people can sign up for a month or a year their preference." E-Gate allows you to find information about publicly traded firms in many different languages. One can check stock quotes, find detailed financial information, create personalised charts of trading history and much more.
"This information is designed to make investment decisions easier and to allow our subscribers to have access to as much information as needed in order to conduct a thorough due diligence of their potential investment situations," she said.
Ask her what differentiates AlphaTrade from its competition and she is quick to reply: speed, accuracy, objectivity and ease of use.
"We believe that most individuals are lacking in any financial knowledge that can elevate them into a different financial status, and most of the 'expert' advice currently available does not address the real issue of building individual wealth. We continue to think about ways in which technology can improve upon existing ways of learning financial information," Perfect said.
"New areas are explored, ideas prototyped and budding services nurtured to make them more useful to our site visitors. However, no matter how distant AlphaTrade's business model grows from its origins, the root remains providing useful and relevant financial information to those who are the most important part of the ecosystem the millions of potential clients around the world who need accurate and easy to use financial information for their own personal benefit." "Thousands of subscribers use our real-time stock quote service and thousands more use one or more of our alternative financial products. AlphaTrade's current subscriber-base for their real-time service is predominantly North American due to the huge popularity of all North American stock exchanges," she added.
But that is changing with the company taking a strong initiative to attract international clients. AlphaTrade expects its current 65 per cent of clients originating from North America to reduce to approximately 50 per cent by mid-2007 and is actively pursuing foreign markets to ensure this target is reached.
"We have added the Middle Eastern exchanges of Dubai, Bahrain, Qatar, and currently have growing customer bases in China, Korea, Singapore, Saudi Arabia, Russia, India, and Kuwait. Almost all countries are represented and some are growing very rapidly.
"At this moment, the preeminent products are the realtime stock quote service, EGate and our long-view advertising programme.These two business lines are evolving into complementary networks that will expand even more as we capitalise on our international growth prospects," said Perfect.
Diverse products
The company has other products to offer that eventually add up to help the market itself. Website managers use AlphaTrade's E-Trax programme to deliver financial information relevant to the content on their sites.
"This works especially well for branding of the AlphaTrade product mix and for increasing the number of paid subscribers for our realtime stock quote service.
"The underlying premise of all our products is to assist people in understanding and interpreting financial data to promote developing their own wealth strategies," she added.
AlphaTrade wants to emerge as the premier website in the coming years for all sorts of information related to developing financial expertise so you can manage your money and network with other like-minded individuals.
"We already have created the template of a financial community website and this will be enhanced over time and can be customised by region to ensure that visitors are given practical information they can utilise immediately for their own financial gain," said Perfect.
"Of course, all sorts of international and local information will be available to ensure a broad base of knowledge can be obtained."
Targets
Plans for UAE and the Middle East
AlphaTrade has developed some new products that the company's executives believe will help them in building and developing a strong presence in foreign markets.
To assist in building clients in the Middle East, AlphaTrade has hired Galadari & Associates to represent them in Dubai.
Galadari is in the process of registering AlphaTrade in the Dubai Internation Financial Centre and AlphaTrade has had preliminary discussions with the Dubai Internation Financial Exchange with respect to potential future alliances to promote stock market information in the Middle East.
There is an untapped market for inexpensive and high-quality financial data that can be easily afforded by the Middle Eastern investor. As the growth in the Middle East escalates, personal wealth will increase for a larger group of people who might have a strong interest in the financial markets, and AlphaTrade will be perfectly positioned with the right product mix to capitalise on that growth, said Perfect.
Revenue stream
"AlphaTrade's utility and ease of use have made it one of the best-known brands almost entirely through word of mouth from satisfied subscribers," said Perfect. "As a business, AlphaTrade generates revenue from its sophisticated and comprehensive financial products and by providing advertisers with the opportunity to deliver measurable, cost-effective online advertising that is relevant to the subscribers utilising the information."
Competition
"When talking about competitors for AlphaTrade, the comparison is not so direct since AlphaTrade has branched out into the online advertising world and is solidly entrenched in providing a diverse group of financially related products," according to Perfect.
"In fact, you could take an amalgamation of an online advertising company such as Google and combine it with a financial data provider such as Bloomberg and this would be the best comparison for our future growth potential," she said.
By Nikhil Lohade
Emirates Today 2006
