What Works in Alert Services

Imagine this: A workaholic Wall Street analyst with nothing better to do Friday morning downgrades your biggest holding. You come back from holiday shopping around 5 to discover that the stock's lost 20%. Isn't that something you wanted to know while you were out spending money?

If so, you need an alert. Alerts are instant information blasts from brokers, news organizations or other services that come when, for example, there's news about or action in a stock. Alerts can tell you something as simple as when a price hits a target to something as complicated as a percentage change from the stock's average daily volume.

Alerts are fast becoming one of the most important ways sites get information to investors. At Schwab, for example, about 950,000 subscribers have signed up for at least one of its alerts (about 25% of its Web users). With the increasing ubiquity of email, the broker only expects usage to increase.

"We expect this channel to be above and beyond the Web," says Michael Raneri, VP of email products and services at Schwab. "It's just ripe for reaching out ... and giving content to your customers that they've asked for."

Not every alert system is the same. Zacks.com, for example, sends alerts about analyst earnings projections and recommendations, but they are really just daily email bulletins, not immediate intraday alerts, which are only available on their Web page.

Schwab offers timely email alerts when, for example, a stock hits a new 52-week high or low, volume changes or when a stock price crosses, say, its 60-day moving average. Fidelity, in contrast, offers only "trigger" alerts for simple price targets: "J.P. Morgan (JPM Quote) hits 140."

And how you get alerts varies. Most alert systems use email, which, in addition to PCs, can be retrieved through email-capable pagers and certain palm devices and cell phones. But services such as MoneyCentral.com also alert users through MSN's instant messenger service.

On the flip side, alert overdose can be more annoying than helpful.

Why Alerts Matter

Alerts are a natural for super-active traders who crave constant information. But they also may be a helpful tool for buy-and-hold types who, even if they're at their PC all day, might actually be working at regular jobs rather than tracking the Nasdaq.

I got a feel for the value of alerts while doing my research for our upcoming report on portfolio trackers (more below on where that stands).

Citing alerts as one example, reader Paul Dailey of Murray, Ky., wrote: "I seldom use the Datek tracker because the QuoteTracker software has so much more usefulness." QuoteTracker, one of the more comprehensive and complicated alert services, has email alerts, which Datek does not currently offer.

Another reader, Chris Morris, an information security analyst, wrote: "One thing that I'm beginning to want to look into is setting up alerts to my pager if XYZ stock hits such-and-such price." Schwab user Paul Flack, from the Boston area, says: "The best part about them is that they are good for busy people."

At the same time, firms like Fidelity and Schwab and services like QuoteTracker are currently evaluating their alert services and considering what tweaks and enhancements would better serve customers. (FYI, TheStreet.com recently got into the alert game, too.)

With all this focus, a joint report -- me, the writer, you the investors using the services -- about alerts might help prompt providers to move in a direction that will prove most useful and least bothersome to you.

What I'd Like to Know

Here's what I'd like to hear from you (click here for more on the What Works column):

• How important are alert services to you? And why?
• What alert services do you currently use? Your broker's? Any others?
• What information do you receive from those services?
• What do you want to be able to receive in an alert? News stories? Price targets? Percentage price changes? Volume activity? Earnings or analyst rating revisions? Since services like QuoteTracker are considering alerts with inputs as precise as "five consecutive upticks in five minutes," the more detailed you can be here, the better.
• How important are "account activity" types of alerts -- like electronic order notification or balance updates -- and does your broker offer them?
• How do you want to receive alerts? Email? Instant messenger service? Other? Please indicate both what delivery system you have and what you'd like to have.
• Are there hidden downsides to alert services? Do they function as promised? Where can they stand to improve?

Please write in to [e-mail]. Please include your full name and the broker and/or other alert services you use. Also, please indicate what type of investor you consider yourself to be (e.g., buy-and-hold, active, day trader).

Back to Portfolio Trackers

Last week I asked readers about real-time portfolio updating and related tracker issues, including streaming-real time quotes. Thanks to so many of you for your detailed and helpful responses. I'll have the definitive report next week.

As a preview, I've heard a good deal about MoneyCentral.com, Quicken.com, Quotetracker, Datek, Ameritrade and some of the active-trader services at Fidelity and Schwab. I'd like to hear more about trackers at other brokers. Anyone with a regular account at Schwab, Fidelity or another broker care to weigh in? Please write to [e-mail].

Screening the Screeners

Last week What Works offered its assessment of stock screeners. Maynard Burstein of San Antonio, Texas, responded with a query about Wall Street City, a product by Telescan, which Burstein calls "the granddaddy of screeners." Wall Street City has a screening tool called ProSearch, but it requires a $9.95 monthly subscription. I am not against subscription services per se and I may review them in the future, but the original column focused on free services, a few of which are incredibly robust. Same goes for B4Utrade.com at $25 a month.

One reader asked about JavaTicker.com. This site is slated for a write-up this coming Saturday in Mark Ingebretsen's column about sector investing.

Anything else you'd like to report to What Works about stock screening or another site or service, please write to [e-mail] and please include your full name.