This week What Works takes a hiatus from mutual funds to update a few pressing issues from past columns. I'll return to funds soon to address the many terrific reader comments I received in response to last week's

column about the best online brokers for mutual funds. Please keep sending your views on the subject to, and please include your full name.

Margin Matters

Here's a rub with everyone's favorite feature that has readers frustrated: Some brokers who claim to have

real-time portfolio tracking don't update investor "buying power" -- a function of margin -- in real time.

First, a brief, simplified review on margin and buying power. (Actually, first a warning:

Margin is a treacherous way to invest. Do so with care, if at all.) Margin lets you buy more stock than your cash alone would cover, by letting you use stock as collateral for a loan from your broker. When you borrow money to buy stocks, you build up a "margin balance," or "debit balance." The margin balance tells you

what you owe

, not

how much more you can borrow

. The balance is an obligation to your broker and doesn't change with the value of the stocks you've purchased.

"Buying power" describes the maximum value of stock you can buy without adding funds (cash or stock) to your account. Unlike the margin balance, it


depend in part on the value of stocks you hold. If the so-called initial margin requirement on securities is 60%, that means you can only borrow up to 40% on the value of stock. So if the stock is worth $100, you can borrow $40. If the stock shoots up and is now worth $200, you can borrow $80.

Your buying power essentially depends on the amount that you


borrow against stock, as well as what you've


borrowed (your margin balance), plus certain additional funds you may have with the broker.

Three brokers I spoke with that do real-time updating of portfolios,

MSDW Online





, will update your buying power online during the day if you make a transaction (e.g., buy or sell a stock) or if money moves into or out of your account. But these brokers will not update your buying power intraday based solely on price fluctuations in your stock. Because of regulatory requirements, they say, that calculation is done nightly based on closing stock prices, and you'll see it in your account the next morning. (I could not get a firm answer from


about its policies.)

So if a broker says it updates your account in "real time," yet your buying power seems stuck while your stocks are soaring, this explanation may be the reason why.

Ameritrade Tracker: Mixed Reviews

Early returns on Ameritrade's

new tracker with real-time updating (there's that subject again!) and portfolio "views" are running about 50-50.

Some readers are thrilled. "The biggest reason why I've struggled suggesting Amtrd to friends was because you had to have a pencil and paper and calculator to keep up with your funds to trade with it," wrote

Norm Rasmussen

TheStreet Recommends

of Jenison, Mich. "Now the problem has been solved, and it works great." Writes

Neal Thompson

of Richmond, Va., "what a big step up in convenience."

Others, however, call it a step back. The biggest complaint is that the tracker doesn't show how much your portfolio is up or down for the day. For that figure, you need to look at the market value of your portfolio on the "positions" page -- now updated in real-time -- and compare that figure to your start-of-day balance on the "balances" page. "All in all, I still prefer the old screen to this one," says

Robert I. Katz


Russell Tanner

of Palmer, Ala., says the tracker fails his test: "Do you need pencil and paper to do the math?"

Ameritrade says it intends to change its tracker so that it shows where the portfolio is up or down on the day, along with a few other changes. Any more thoughts? Please email me at

MoneyCentral Newsstand Grows

Followers of my portfolio tracker

series might recall that


tracker offered a

wider selection of news reports keyed off of the stocks in your portfolio than


MoneyCentral tracker does. MoneyCentral recently added another source: the new economy mag

Industry Standard

. The Microsoft tracker is still far behind Yahoo! newswise, but it gets a star here for effort.

Hello, CSFBdirect


officially launched a name change this week, to become


( The change follows from

Credit Suisse First Boston's

purchase of

Donaldson Lufkin & Jenrette

, DLJdirect's parent. (CSFBdirect will continue to trade as a tracking stock under the symbol DIR.)

So far, the transition has been the culprit for at least one glitch -- a brief site outage. On Jan. 8, around 11 a.m., the then-DLJdirect site went down for about 20 minutes when a wire burned out on a firewall server. Any other day, users would have been shuttled to a "redundant" site and wouldn't have noticed a problem. But that day, the redundant system was being used for a live internal test of CSFBdirect. Says Michael Hogan, general counsel of CSFBdirect, "When the wire burned out, we weren't able to shift the mode to the other site because the other site didn't say DLJdirect."

Hogan says phone reps handled all inquiries and customers haven't complained.

Otherwise, except for the new colors, the change seems pretty innocuous. Wall Street research is now from CSFB rather than DLJ, and it is still only available (after a trial period for new customers) to customers with at least $100,000 in CSFBdirect accounts. All account holders will want to know about this change: Checks are now payable to CSFBdirect.

If you find changes you like, or don't, or if you had trouble during the outage, please let me know at