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Investment Basics -- Tutorial Review

Pamela Saalbach

"Investment Basics" Tutorial Review

By Pamela Saalbach

Investment Basics by Competence Software is the first in a series of self-paced learning packages teaching investment principles. The user has the choice of browsing through the material or by enrolling and completing the course. After successfully passing the quiz with 80% correct answers, the user can apply for a certificate of completion.

The self-paced feature is based on learning competency. That is, the user works through the seven topics sequentially and completes a quiz at the end, where, if all questions are not answered correctly, the program instructs the user to review the material that was missed. This nice competency feature ensures that the user does indeed possess basic investment competency upon receiving the certificate.

Target Audience

It appears that this package is targeted at employees who receive U.S. employer 401(k), 403(b) and 457 benefits for retirement. There are opposing camps, apparently, when it comes to satisfying the U.S. Department of Labor's requirements for providing "adequate" information to employees about investing. Some professional advisors to these firms say that there is too much risk in providing employees with such information, while others say that employees will fault their employers if they do not accumulate enough funds for retirement. The tutorial claims to provide "neutral" and "factual" information only, to suit both camps. But be warned, there is limited application of this package to users from countries other than the U.S.

Investment Basics Desktop Tutorial


Web-based Personal Finance Course

It is timely that I am reviewing the Investment Basics software tutorial, as my husband and I just completed a 13-week Personal Finance course delivered over the Web. Investment Basics has given me a chance to see how a desktop-delivered tutorial might compare to a Web-delivered course.

First of all, the estimated time for completing the Investment Basics software tutorial is much shorter-an estimated six to eight hours-as stated clearly in the introduction. In fact, the introduction serves as a good orientation to the material included in the course. It also shows how to use the software interface that was programmed using Authorware. Stocks, bonds, mutual funds, and other investments are the major topics in the tutorial after the user is introduced to the definition of an investment.

Less than Satisfactory User Interface

Unfortunately, however, Authorware slows the pace of the simulations in the course and limits what can be done with them. Also, there is some confusion in navigating to the next topic, despite the navigational information in the introduction. I browsed through the entire tutorial and was still hunting for the proper place to click for the next screen by the end. This problem interrupts the user's attention to the material when he or she must decide if it is time to press the "exit" button in the lower *left* corner

of the screen (when a simulation is complete), or press the "forward" arrow in the lower *right* screen (at all other times). It was also difficult to figure out how to go back just one screen-you were forced into going to the first screen of the previous topic and paging through to the place you wanted. Also, a much larger "live" area for the mouse arrow could be provided so the user doesn't have to spend time in precise arrow placement just to move on to the next screen. The sliders in the simulations drove me to distraction, because it was difficult to position them at the values I wanted to input. There was an option to manually input the values at one point, but it was not at all obvious how to do it.

Content: Investing is only a small part of sound Personal Financial Management

Naturally, if comparing the time completion factor alone, I learned much more in the 13-week Web-delivered course. Also, the textbook I used was superb in its presentation of investing and personal finance basics. I most appreciated the fact that investing maintained its closely intertwined context with other important personal financial matters-including emergency-fund savings, health, life and property insurance, large item purchases such as automobiles and homes, and the transfer of one's estate-as well as stocks, bonds and mutual funds. On the other hand, if a person only wanted to review the Investment Basics of stocks, bonds and mutual funds, the tutorial was fine. I wonder if the remainder of the tutorials in the Investment Competence series will cover the other topics from my Personal Finance course? If not, I worry that someone like my nephew who has recently entered the work force would fully appreciate the somewhat brief "time value of money" explanations in the tutorial. Thinking back to my course, this concept was at the root of all the other personal financial decisions one had to make, as were financial priorities and tolerance for risk. It bothered me that the tutorial assumed I was to go to a professional financial advisor for personal financial counseling so that this tutorial was more meaningful.

The Personal Finance course on the Web, however, made it clear that I had to start with building my own personal financial plan. While the tutorial clearly states that it is only covering investment basics, if it is truly positioned for a general employee populace, the content really should begin by giving the employee an appreciation of where investing fits into the overall personal financial planning process. Also, I didn't see any mention of a personal financial advisor until I was most of the way into the tutorial (in Sections F and G).

In the tutorial, I felt I needed supplemental reading material and financial tools like a financial calculator I downloaded from the Web that I could go "work with" in making the course material fit my own circumstances. Personalizing this information would nearly guarantee that a user would retain the information contained in the tutorial. While some personalization exercises were offered in Section G, I couldn't easily return to them after I completed the tutorial, and I wouldn't have wanted to officially start and maintain my own personal data there either. An appendix with a blank simulation would have been nice, as would have been suggestions for common software packages I could purchase for personalization. Quicken and Managing Your Money come immediately to mind.

In favor of it's content, I will say that put and call options and long, short and hedge investing with respect to stocks were (finally) demystified for me in the tutorial. With a little more personal practice in the Web-based stock simulations, I could probably pull these off soon.


In summary, it is essential to keep investments in their place in one's total personal financial planning. I don't think many people do. I know my husband and I, and others, were faulty in this regard. After taking the Web-based course and reviewing our financial circumstances, our "chance" decisions about our retirement funds turned out to be: "Not bad." "Could have been worse." But we could have done *much* better for ourselves if we had long ago known and done something about all we learned in the Web-based Personal Finance course. I fear that Investment Basics will encourage employees to focus their attention on the wrong financial area first. Investment *follows* emergency funds, insurance, purchasing a house, and so on. In other words, I wouldn't want to be handed this tutorial by my company as a response to my questions about my retirement fund.

If a company is depending on this tutorial to "round out" employees' knowledge about investing for retirement, then I hope it will supply additional materials to fill in other knowledge gaps that are essential for sound decision-making before an employee can judge that investing is, in fact, fulfilling the role he or she thinks it is for retirement. For instance, investing before one has an emergency fund in place is folly for most, as is investing prior to being adequately insured. Yet the tutorial does not address these. An employee must frequently decide how much he or she is putting into an employer-sponsored retirement plan. But knowing if it is the right amount, or if it is the right fund and investment return for oneself requires much more knowledge about where investing fits with other financial priorities in one's life.

While my review may sound harsh, I did not mind the tutorial. It would probably be helpful for some people. My concern, however, is for the masses of people who never pay much attention to their retirement programs or to investing or, most importantly, to overall personal financial planning (as my husband and I did until recently). There are so many more of this category of users than those who would spend even six to eight hours on this well-thought-out tutorial. I hope future additions to this series consider that investing is the *last* puzzle piece next to estate planning in a person's total personal financial planning-after all the other puzzle pieces for secure daily living are in place. I hope Competence Software will produce those other puzzle pieces first. I don't want to know the finer points of investing, as it advertises in its User's Guide for its future series additions.

Not bad, if Investment Basics is the first in a series about *personal financial planning*-not just about investing.

Copyright 1997 by Pamela Saalbach. All rights reserved.

© Algorithmica Japonica Copyright Notice: Copyright of material rests with the individual author. Articles may be reprinted by other user groups if the author and original publication are credited. Any other reproduction or use of material herein is prohibited without prior written permission from TPC. The mention of names of products without indication of Trademark or Registered Trademark status in no way implies that these products are not so protected by law.

Algorithmica Japonica

July, 1997

The Newsletter of the Tokyo PC Users Group

Submissions : Editor

Tokyo PC Users Group, Post Office Box 103, Shibuya-Ku, Tokyo 150-8691, JAPAN