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Computerized Investing > November/December 2007

Computerized Investing's Guide to Buying a PC

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by Wayne A. Thorp

Mirroring the last few years, it is a buyers’ market for those looking for new personal computers (PCs), where shoppers will find systems to match almost every budget. For the contrarian PC buyer, Walmart.com (www.walmart.com) currently offers an Everex desktop system (with a monitor) powered by a Via Technologies processor running Windows Vista Home Basic for $299. On the opposite end of the spectrum, most of the major PC makers offer high-end gaming systems, which can cost well in excess of $5,000.

This annual PC buyers’ guide is intended to help readers get the most for their money, while providing guidance as to the type of system they should consider buying. The target audience is the mainstream user looking to perform investment tasks or analysis such as portfolio tracking and management, stock and mutual fund screening and analysis, and technical analysis and charting, as well as general-purpose computing such as Web-browsing, E-mail, word processing, and spreadsheet building. Depending on your own individual needs, your ideal system may be more or less advanced than the systems we recommend.

Step 1: Define Your Needs

The biggest mistake anyone can make when buying a new PC is to choose one that does not meet their current needs, let alone what they may wish to do in the future. Some people try to save money by purchasing a marginal system, only to find that it is obsolete in a couple of years and needs upgrading or replacing. In the end, these added costs and headaches more than outweigh the additional upfront cost of a higher-end system.

On average, a mid-to-high-end desktop system bought new today will offer more-than-adequate capabilities over the next three or four years. Given the rate of change in technology, it is highly unlikely that a new system bought today will last longer.

Another mistake some people make when buying a new PC is to buy one that is “well-equipped,” even if they don’t need all the options. They are seduced by all that the system can do without stopping to consider whether they actually need those capabilities.

Both of these instances represent wasted money the buyer could have saved had they done their homework ahead of time. Part of that involves spending time to determine the tasks you wish to accomplish with your system. Ideally, you will then purchase a new system accordingly.

In the context of computer-assisted investment analysis and tracking, software-based technical analysis is arguably the most system-intensive. This type of analysis involves the manipulation and graphical display of large quantities of data—typically opening, high, low, and closing prices as well as volume data over varying time periods. Higher-level analysis entails the backtesting of technical trading systems to generate buy and sell signals for a variety of financial instruments. Such tasks require a system with a processor powerful enough to churn quickly through large amounts of data. In addition, you will usually find that a high-quality, high-resolution display and a color printer are must-haves for easy viewing and printing of charts and graphs.

Depending on the type of analysis you are performing and the service you are using, you may also need to store a large amount of historical data for a large universe of companies or financial instruments. This is typical of most disk-based fundamental screening and analysis programs. In addition, some technical analysis programs read price and volume directly from your system, so there may be a need to store years of historical price and volume data for thousands of companies.

As Web-based analysis tools grow in popularity and functionality, and as day-to-day downloading of data increases, a high-speed Internet connection (if available in your area) is probably also desirable.

Laptop vs. Desktop

Once you have decided it is time to purchase a new system, there is the question of whether to go with a notebook/laptop system or a desktop PC. While both have their merits, the choice becomes clearer as you answer the following questions:

  • Do you need a computer while traveling?
  • Will you need to use the computer in multiple locations?
  • Do you have space (desktop) restraints where you plan to use the computer?

If you answered yes to any of these questions, you should consider a notebook system.

However, these situations are more conducive to choosing a desktop system:

  • Tight budget;
  • Need/prefer a larger display;
  • Require the most powerful features available.

When considering desktop systems versus notebooks, also be aware of the difficulties you could face when attempting upgrades. Desktop systems tend to be easier to upgrade and repair, mainly because there are a number of “generic” components you can install with relative ease that won’t present compatibility issues.

Notebook PCs, on the other hand, tend to have hardware designed specifically for that model, making them more expensive to repair and more difficult to upgrade. You may be able to pick up a new hard drive or additional memory modules from the local computer superstore, but you will more than likely encounter difficulties installing component upgrades.

Lastly, there are definite cost considerations to buying a laptop—expect to pay a premium for mobility. Table 1 shows the price difference between comparable (in terms of computing power) mid-range desktop and notebook systems.


Picking an Operating System

Depending on what you want to do with your new PC, you must consider the software available for performing these functions. This may ultimately dictate which underlying operating system (OS) you choose. The two most popular consumer operating systems on the market today are Windows from Microsoft and Apple Inc.’s Mac OS.

By many estimates, Microsoft Windows controls roughly 90% of the worldwide OS market. In contrast, Apple’s Mac OS worldwide market share is significantly lower—between 2.5% and 6.6%, depending on the source and method of measurement.

Given these market conditions, it is not surprising that most software companies producing specialized programs tend to focus their attentions on the Windows platform. As a result, it is especially frustrating for Mac users looking to perform higher-function investment analysis, where the selection of specialized software is sparse.

The majority of Mac software titles for individual investors are personal finance programs such as Quicken. Even then, however, the advanced features found with their Windows-based cousins are often lacking in the Mac version. In addition, some of the most popular finance Web sites, such as MSN Money (investor.msn.com), use technology that renders their most useful features unavailable to Mac users.

Windows Vista

This past April, amidst much fanfare, Microsoft released its first update of the Windows operating system in almost six years—Windows Vista. While Microsoft has been relatively tight-lipped about Vista sales, most press outlets agree that the response within the marketplace has been lukewarm at best from users upgrading their systems.

The biggest complaints that users have had with Vista, to date, relate to issues of performance, compatibility, and reliability. In addition, the weighty system requirements needed to make full use of Vista capabilities turned off many consumers. To this point, very few large businesses have migrated to Vista because of compatibility issues with some current software.

Beyond the many “under the hood” changes incorporated in Vista, Microsoft’s programmers made significant changes to its look and feel as compared to earlier OS versions. Vista offers high-end graphics effects with the enhanced Avalon graphics engine, and the new Aero interface adds depth to the desktop with transparent icons and program windows that allow users to see what is going on behind the scenes, provided they have the right graphics capability.

After months of speculation and delays, Microsoft finally announced at the end of August that it would release the first Service Pack for Vista (Vista SP1) in the first quarter of 2008. A service pack is a downloadable update to software that fixes existing problems and, in some cases, delivers product enhancements. Vista SP1 will consist mainly of the patches, fixes, and updates released by Microsoft through Windows Update aimed at improving the performance and reliability of the operating system. According to Microsoft, Vista SP1 will not include any new features.

There are four versions of Vista—Home Basic, Home Premium, Business, and Ultimate. According to Microsoft, Vista Home Premium is the preferred edition of Vista for home desktop and mobile PCs. It includes Windows Media Center and its special interface, which turns your PC into a digital entertainment center that you can control via remote control, mouse, or touch screen. With Windows Media Center, you can browse your digital photos, listen to music, play DVDs, or watch and record TV. Vista Home Premium also allows you to burn photo slide shows and home movies to DVD. At the time of this writing, complete packages of Vista Home Premium were selling at Microsoft.com for $196 to $254.

Home Basic is the only version that does not support Vista’s advanced graphics engine and Aero interface. It is intended for those with basic home computing needs—browsing the Internet, E-mail, or viewing digital photos and is selling for $129 to $214 at the Microsoft Web site.

Microsoft specifically designed Vista Business for business customers; it offers enhanced networking tools and the Windows Mobility Center, which has special power-saving utilities for mobile users. Vista Business costs between $203 and $312 from Microsoft.com.

Lastly, Vista Ultimate combines the features of Vista Home Premium and Vista Business and adds Windows Ultimate Extras for the most robust version of Vista. However, Microsoft has not produced anything of great value in the Ultimate edition, and most home users will be satisfied with Vista Home Premium. Full versions of Vista Ultimate are selling at the Microsoft Web site for $275 to $415.

The decision to upgrade to Vista ultimately depends on two things. If you have a system that is more than a couple of years old, chances are you will have to do some level of upgrading to your current system in order to make use of all of Vista’s features. Therefore, one issue is whether you want to spend the money on a new system in order to use Vista.

The second issue involves software. If you rely heavily on certain software, make sure that it is compatible with Windows Vista.

Despite the negative press Vista has received since its release, we have not run across scenarios that would lead us to recommend not running it on a new system. Having said that, if you are currently running Windows XP and do not have immediate plans to update your computer, we feel that there is no compelling reason to upgrade to Vista until you decide to purchase a new PC.

Windows XP

With Vista’s release, many Windows XP users worried that they would be “forced” to migrate to Vista. Rest assured, however, that Windows XP is alive and kicking—perhaps to Microsoft’s chagrin. Despite the efforts of Microsoft’s marketing machine leading up to and following Vista’s release, XP is still in demand. Even Dell, which had switched almost entirely to Vista-based systems following its January release, bowed to customer demand and resumed offering XP as a “downgrade” option for consumer and small-business users. Other vendors have also resumed offering XP for business customers.

Microsoft has announced it will end retail sales of XP and sales of XP-powered PCs by large resellers as of June 30, 2008; if you want to buy a new PC but do not want Windows Vista, keep that date in mind. Ultimately, Microsoft intends to end all support of XP on April 8, 2014.

Mac OS X

These days, you may have forgotten that Apple is in the computer business; it even dropped the word “Computer” from its name. In fact, it is a “true” computer company—making hardware and the software that runs it.

Apple has benefited greatly from the so-called “halo effect” of its wildly successful iPod digital personal music player and the iPhone, introduced earlier this year. Consumers impressed by their experience with Apple’s consumer electronics (and perhaps dissatisfied with Windows) are migrating to the Mac platform in record numbers. As a result, Apple moved up to the number-three slot in the U.S. for the third quarter of 2007 with 8.1% of the American PC market, up from 6.1% a year ago.

Among AAII members, however, Mac usage has remained static over the last couple of years. Between 2006 and 2007, the percentage of AAII members using a Mac increased very slightly from 7.4% to 7.5% (see Table 2).

On October 26, 2007, Apple released the latest update to its Mac OS X operating system—Leopard. Proving that it is not immune to product delays, which plagued Microsoft’s release of Vista, Leopard arrived roughly six months later than originally planned. However, it still only took Apple a little under two and a half years to upgrade their OS. Many of Leopard’s purported 300 changes are tweaks to existing functions. However, there are several new features worth noting, including the Time Machine back-up utility, along with upgrades to various existing features such as the Spotlight search engine.

All new systems sold by Apple have Leopard pre-installed. But for Mac users looking to upgrade to Mac OS X 10.5 Leopard, be sure that your system meets Leopard’s system requirements. Apple designed Leopard to operate on all Macs based on the Intel processor, as well as Power PC G5 systems. However, according to Apple, if you are running a G4 system with a processor slower than 867MHz, you will need to upgrade your system before upgrading to Leopard. Apple has maintained its pre-release pricing structure for Leopard—$129 for a single-user copy or $199 for a five-user license.

If you are drawn to the Mac’s stability and reliability, but rely on a few Windows-based applications, there is software available that allows you to run Windows applications on Mac-based systems.

Apple’s Boot Camp allows users to install and run Windows XP or Vista on any Intel-based system running Mac OS X Tiger, the predecessor to Leopard. However, it does not allow you to run Mac OS X and Windows simultaneously—you must reboot your system to switch between the two operating systems.

Prior to Leopard, Boot Camp was available as a separate free download from the Apple Web site. However, the license to use Boot Camp expired with the release of Leopard, and Apple will not release future driver updates for earlier versions of Boot Camp. Therefore, if you are a Mac user who depends on Boot Camp to run Windows-based applications, you will need to upgrade to Leopard to receive continued support.

Parallels Desktop 3.0 (www.parallels.com) and VMware Fusion (www.vmware.com/mac) offer the flexibility of running Windows XP or Vista and Mac OS X at the same time without the need to reboot. However, you still need a Mac system with an Intel processor. Both systems offer trials, after which either will cost you $80 for continued use.

Using Boot Camp or Parallels requires an added expense that many would-be users overlook—you still need to buy a copy of either Windows XP or Vista operating systems.


Key PC Components

For many, the term computer brings to mind a singular item. However, like many other machines, it is a collection of pieces, each relying on the others to function properly. The pieces of a computer, typically referred to as hardware, include processor(s), hard drives, optical drives such as CD-ROM and DVD-ROM, and video and sound cards.

Having a basic understanding of the various types of hardware, and the functions they perform, will help you to design a system that is right for you. Below we discuss the major pieces of computer hardware.


Perhaps the most expensive component of a PC is also the smallest—the CPU (central processing unit) or processor. However, don’t let its size fool you, as it is arguably the most important component; it is the engine, or brain, of the computer—executing operations, performing calculations, and coordinating the other hardware components. Theoretically, the faster the processor, the more quickly the computer will function, although other issues can come into play. Factors such as the amount of memory (RAM) your PC has can have a more tangible impact on the computer’s performance than the processor.

The two main players in the consumer-oriented PC processor industry are Intel and AMD (Advanced Micro Devices). While the two companies have battled each other for years, Intel’s position as the top chipmaker has never been in jeopardy. During the third quarter of 2007, AMD controlled 23.5% of the PC microprocessor market, up from 23.1%, compared to Intel’s 76.3% market share, according to IDC.

Since the first processor was created almost 40 years ago, manufacturers were able to increase the speed and power of a processor by increasing the number of transistors on the chip die.

However, as the physical limitations of adding more transistors on the chip increased, companies shifted to multi-core processors. The first dual-core processors introduced in 2005 consisted of two independent microprocessors (cores) on the same chip, or die. In late 2006, the first quad-core processors, with four processing cores on the same chip, entered the market.

However, there is no linear relationship between the number of cores and overall processing speed—a dual-core chip is not twice as powerful as a single-core chip. But having more than one processor does allow for more efficient processing of multiple tasks at the same time. Therefore, these types of processors offer advantages to “power” users—high-end gamers, IT administrators, and software developers.

Unless you are planning to perform tasks that are extremely processor-intensive, such as heavy-duty gaming, video editing, or iPod video converting, keep in mind that you don’t need the latest and greatest processor inside your new PC. To save some money without sacrificing a lot of performance, you may wish to consider a system with a processor that is a couple of generations behind the newest processors.

For mainstream desktop systems, some of the more common choices available today are Intel’s Core 2 Duo and AMD’s Athlon 64 X2 Dual Core processors.

On the laptop side, you will find AMD’s Athlon 64 X2 Dual Core Mobile and Turion 64 X2 Dual Core along with Intel’s Pentium Dual Core and Core 2 Duo in most mainstream laptop systems on the market today.

Data Storage

As PCs become more powerful, there is an incentive for software makers to write software that can exploit the latest technology. Furthermore, more users are getting involved with digital photos, video, and music.

In addition, any computer owner should have some type of backup plan in place, given the exponential increase in the number of attacks from hackers and virus-writers.

All of this requires a growing amount of hard disk space—both internal and external—to store it all and leave room for more over time. This section discusses key hardware devoted to data storage.


Computers have two types of memory—temporary and permanent.

With temporary memory, you lose any data saved in it when you shut the computer down. The most common type of temporary memory in a computer is RAM, or random access memory. RAM is the primary storage for a computer—it is the working area used for loading, displaying and manipulating applications and data. Therefore, the amount of RAM your system has impacts several aspects of the computing experience—most importantly, the types and number of software programs you can run simultaneously.

Even with a top-of-the-line processor, a lack of physical memory can have a significant negative impact on the performance of the PC. Furthermore, applications such as anti-virus software that are always running in the background can quickly use up a system’s memory (as well as processor) resources.

Compared to the CPU, is it relatively easy to add more physical memory if needed. However, it is probably worth paying for as much memory as you can afford up front.

The latest operating systems—Windows Vista and Mac OS X 10.5 Leopard, require a significant amount of data compared to their predecessors. Microsoft recommends a minimum of 512M (megabytes) of RAM to run Vista and 1G (gigabyte) of memory to run the full-featured version with the advanced graphics. Apple, too, recommends at least 512M of memory to run Leopard. However, software companies tend to understate requirements to make their products appealing to a greater number of potential customers. This is especially the case if you plan to use any Windows Vista version besides Home Basic, where 2G of memory is optimal.

Even today’s budget PCs ship with at least 1G of memory. However, given the low cost of memory, we recommend going with no less than 2G. Adding an additional gigabyte of memory when customizing a system costs about $100.

Internal Hard Drives

Temporary memory, as we have discussed, plays a vital role in the operation of a PC. However, it is equally important to have the capacity to store data for future use. This is where permanent storage comes into play, which allows you to retain data even after you shut down the PC. The primary type of permanent storage in personal computers is the internal hard drive.

The most important factor to consider when selecting an internal hard drive is the size, or storage capacity. Today’s operating systems and programs consume a great deal of available disk space. Microsoft recommends at least 40G of free hard disk space just to install Windows Vista Premium. Leopard, according to Apple, requires 9G of hard disk space. The explosion of digital media has also placed greater emphasis on the need for adequate storage capacity. Digital photos, music, and video can take up a large amount of your hard drive very quickly.

Furthermore, some investment database programs, such as stock or mutual fund screening applications, can take up hundreds of megabytes of disk space, so you want to have enough capacity for these applications as well. Most entry-level desktop PCs today offer at least 160G of hard disk capacity, and this is the lowest amount you should consider. Many mainstream desktop systems today ship with hard drives between 250G and 500G in size and, unless you have no interest in digital photos or music, we recommend a minimum of 300G in hard disk capacity.

Notebook systems tend to have smaller internal hard drives. This is especially true for “value” notebook computers, which can ship with hard drives as small as 60G. Most mid-range notebooks offer hard drives that are at least 120G in size, while higher-end notebooks offer up to 250G of hard disk space.

Beyond size, a secondary consideration for internal hard drives is the speed at which they spin. The faster the drive rotates, the faster it is able to read and write data. While not a major concern for casual computer users, those who are into gaming and other multi-media applications will want to pay attention to drive speeds.

Most drives in desktop systems spin at 7,200rpm (rotations per minute), although you may find 10,000rpm drives in high-performance systems. Laptop hard drives tend to have lower speeds in order conserve power and to generate less heat, although a speed of at least 5,400rpm is preferred.

Optical Drives: CD and DVD

Another type of data storage device is the optical drive, which uses lasers to read data from and write data to optical disks such as CDs and DVDs. Today it is all but impossible to find a PC without an optical drive, including CD writeable/rewriteable, multi-format CD/DVD writeable/rewriteable drives, or DVD writeable/rewriteable drives.

DVD, which stands for digital versatile disc, is the preferred optical drive on the market today. DVD drives can now also read all types of CDs—standard music CDs, CD-Rs, and CD-RWs. The applications for DVDs on desktop systems are limited mainly to storage, unless the computer is a media center offering a cinematic viewing experience for DVD movies. With laptops, however, many users like the ability to view DVD movies while traveling.

Recordable and re-writeable DVDs offer impressive storage capacities of up to 4.7G for single-layer (SL) single-sided discs and up to 8.5G for dual-layer (DL) single-sided discs, or 9.4G for single-layer double-sided discs and 17G for dual-layer double-sided discs.

Since the advent of recordable DVDs, there have been two main competing standards—DVD-RW and DVD+RW—where DVD+RW drives cannot write to a DVD-RW disc, or vice versa. It is doubtful either standard will become the standard, but, luckily for consumers, there are “combo” drives that can write both formats. We strongly recommend purchasing a multi-format DVD+-R/RW drive if you are planning to write or burn DVD discs. The majority of internal drives such as these cost less than $100. Furthermore, DVD-R and DVD+R discs, purchased in bulk, can cost between $0.40 and $0.85 apiece.

Just as the industry was moving past the DVD+R versus DVD-R feud, hardware companies decided to muddy the waters once more with the next generation of DVD devices based on blue lasers—HD DVD and Blu-ray.

Blue light has a shorter wavelength than red (the laser used in standard CD and DVD formats), so it can burn, or write, roughly three and a half times more data onto a disc. However, Blu-ray and HD DVD players can only read discs recorded in their respective format—you cannot play a Blu-ray disc on a HD DVD player, or vice versa. While hybrid high-definition players are slowly coming to market, including LG Electronics’ Super Blu player, the costs at this point seem prohibitive (the LG player currently sells for over $1,000). Furthermore, as of late October, there were fewer than 350 movie titles available for either format.

At this point, we continue to recommend that you hold off on spending the money on hardware for high-definition DVD until either prices become more reasonable or the industry chooses a universal standard.

External Storage Devices

All of the hardware components we have discussed thus far have been internal in nature—meaning they reside within the case of the PC. However, in this age of portability, many PC users do not want their data “tied down,” so they are making use of portable storage media, such as external hard drives and flash memory devices that you can connect to your system via either USB or FireWire.

USB vs. FireWire

Universal Serial Bus (USB) 2.0 is a high-speed connection for connecting all sorts of peripherals to a PC—mice, keyboards, printers, external hard drives and CD/DVD drives, compact flash drives, etc. USB’s high-speed competitor, which Apple developed, is IEEE-1394 or FireWire.

While FireWire offers significantly higher data transfer speeds—up to 3.2Gbps (gigabits per second) for FireWire 800 versus up to 480Mbps (megabits per second) for USB 2.0— the royalties demanded by Apple and other patent holders slowed its implementation. This, along with the relatively higher costs of FireWire-based peripherals, has prevented FireWire from achieving the same mass-market appeal as USB 2.0. Therefore, most peripherals, including external hard drives, use USB 2.0 connectors.

However, FireWire is the preferred method of connecting digital-video-related electronics—digital camcorders as well as external DVD players and writers. Therefore, if you intend to do video editing on your PC, we suggest getting a system with a FireWire card, which will cost less than $30 for the upgrade.

No matter what type of system you purchase, make sure it has several USB 2.0 connectors, including some on the front of the case for easy access.

Flash Memory Devices

For secure and highly portable data transfer and storage, there are a number of flash memory devices available today. Unlike an internal or external hard drive, flash-based devices store data on a chip instead of writing data to and reading it from a “platter.” Therefore, there are no moving parts, which makes Flash memory much more durable. In addition, they require very little power to operate, so they do not require their own power source.

Flash media cards have long been the removable media choice for digital cameras, handheld devices such as PDAs, and the like. Flash technology also has been integrated with a USB interface to arrive at USB flash drives, which are small enough to fit on a keychain yet offer storage capacity far greater than CDs or even DVDs. Standard one-gigabyte (1G) USB flash drives, on average, cost under $30. Apple’s iPod shuffle and nano personal media players use flash memory instead of a hard drive found in other iPod models. The shuffle currently has a 1G capacity and retails for $79. The iPod nano offers 4G and 8G capacities at costs of $149 and $199, respectively.

These examples illustrate perhaps the biggest drawback of compact flash devices—the cost. Compared to traditional external hard drives (described below), the cost per storage unit is significantly higher. The 8G iPod nano costs $0.024 per megabyte.

Ultraportable Hard Drives

Just like with their internal cousins, the capacities of external hard drives continue to climb, with capacities in excess of one terabyte (1T; one trillion bytes or 1,024G). Such large amounts of storage are also available in relatively small packages in the form of external 2.5" drives. Forty gigabyte (40G) external 2.5" drives cost around $50, while 160G drives typically cost between $100 and $140.

The price per megabyte for these drives is only a fraction of the cost of flash memory. The 160G Mobile Hard Drive for USB 2.0 and FireWire from Lacie (www.lacie.com) costs $160, or $0.00098 per megabyte. By means of comparison, the per-megabyte cost of the iPod nano is over 2,300% greater than that of the Lacie Mobile Hard Drive.

Back-Up Systems

Many PC users have never considered coming up with a regular backup plan. Unfortunately, it is too late once you lose valuable data to a system crash or virus. In order to save yourself anguish and frustration, it is a good idea to establish a consistent and reliable backup system for your computer before disaster. Luckily, the days of feeding floppy disc after floppy disc into your PC are long gone.

Ideally, you will use some form of external media to back up your system, with DVD-Rs and external hard drives offering effective back up options. Overall, however, using an external hard drive as well as automated backup software is probably the easiest way to ensure regular system backups.

Both Windows XP and Vista offer on-board backup utilities as well as Mac OS X Leopard’s Time Machine, which allow the user to set up backup schedules. In addition, applications such as CyberLink PowerBackup (www.cyberlink.com), Acronis True Image Home (www.acronis.com) and NTI Shadow (www.ntius.com) are a few well-regarded system backup and disaster-recovery applications available.

Video & Sound

Today’s personal computers are much more than mere tools for surfing the Internet, sending E-mail, or even screening for stocks or mutual funds. They have now evolved into mini home-entertainment centers, with some even allowing you to watch and record TV programs. However, even if you aren’t looking to buy one of these “media center” systems, chances are at some point you will listen to audio clips or music or watch video clips or movies with your computer. Depending on how much multi-media usage your PC will get, you will want to be sure to buy audio and video capabilities to match.


Earlier we discussed the CPU, which controls much of what goes on with the PC. However, computers also have a GPU, or graphics processing unit; these chips create the images you see on the display. Three-dimensional graphics (3D) are becoming the norm, especially with high-end gaming applications. Even the latest Windows Vista and Mac OS X Leopard operating systems are implementing advanced graphics that push the envelope of traditional computer capabilities. Most desktop systems today have dedicated video memory that offers better graphics capability compared to “integrated” video memory. Some value desktop systems and many notebook systems still have this type of video memory, where the system uses the primary memory for both video and for other operations. If you are not sure, inquire as to whether memory is dedicated specifically to the video system or whether the video memory is integrated with the main memory. If you plan to use your new PC for gaming, graphics, or other serious multi-media applications, a dedicated graphics card is a necessity. In addition, if you plan to run Windows Vista’s Aero graphics environment, you will need at least 128M of dedicated graphics memory (as well as a graphics card that supports Microsoft’s DirectX 10 3D graphics technology). Upgrading to such a card from the manufacturer for a desktop system will cost you around $60. For notebook systems, the cost will be roughly $100.


The vast majority of new systems today come equipped for sound, although you have options that will affect the overall sound quality. Many desktop systems and most notebooks have integrated audio, which should suffice for listening to MP3s and CDs or performing general computing tasks.

However, if you are looking for enhanced audio, you may have the option to upgrade to software-enhanced audio or to a dedicated soundcard. Software-enhanced sound, which typically costs around $25, is a step up from basic integrated audio. Furthermore, it is usually the only internal audio upgrade available for notebook systems.

If you want the highest quality sound, especially for watching video or recording audio, hardware-driven sound is the best option. This entails a dedicated sound card, which is an option only for desktop systems. An upgrade to a dedicated sound card direct from the manufacturer will cost around $100.


For the most part, we have covered the “insides” of the PC, but this does not mean that we have finished putting together a system. There are still a few important considerations, including the monitor.

While the computer itself does the heavy lifting as far as running software and performing calculations, the monitor is equally vital since it allows you to view the fruits of your PC’s labors.

When shopping for a new desktop system, be sure that the quote you receive includes the cost of a display; some companies quoting “low” prices for new computers may be selling them without a monitor. As you compare prices of new systems, do not look to the monitor as an area where you can save money. The increased viewing area and clarity of a larger display is well worth reduced eyestrain through the years.


LCDs (liquid crystal displays) have firmly entrenched themselves in the computing landscape, to the point where it is virtually impossible to find a new desktop system with a cathode ray tube (CRT) monitor. Many of the large PC makers, such as Dell and HP, do not appear to offer CRTs as on option even for custom systems.

For laptop buyers, LCD is the standard. However, manufacturers such as Dell and Apple have begun flirting with LED-backlit displays. While LED does not change the overall viewing experience, it does allow for much thinner systems overall compared to traditional LCDs—two definite benefits for portable systems. However, be prepared to pay a premium price—Dell’s 13.3" XPS M1330 currently starts at $1,499 and Apple’s 15" MacBook Pro costs $1,999.

Screen Size

Almost all new desktop systems today offer displays that are at least 17" in size, with upgrade options of 19", 20", or even 22" common. At the manufacturer level, upgrading from a 17" to a 19" LCD is only around $20. In addition, many new consumer systems offer widescreen LCDs versus standard flat panels found in many business-oriented systems. If you plan to use your PC for extended periods, we recommend a 19" widescreen LCD monitor, given the negligible cost of the upgrade.

For laptop users, there is a trade-off between screen size and portability. Today’s ultra-portable notebook systems, which usually weigh less than five pounds, have screen sizes that average around 12" or 13". Desktop replacement notebook systems with screen sizes ranging from 17" to 20" can weigh over seven pounds, an important consideration if you plan to travel with such a system.


A display’s resolution is the number of pixels that make up the actual viewing area. LCD displays have what is called a “native resolution”—generally the highest resolution that it can best display. If you plan to use your system for gaming or for watching movies, a 19" wide-screen display with a 1440 x 980 resolution is a worthwhile investment. The cost of such a display, on average, is currently between $170 and $230.

Internet Connectivity

Very few people these days use a home computer without accessing the Internet. Among AAII members, slightly less than 99% regularly use the Internet, about the same as a year ago. There are several ramps onto the information super highway—dial-up modems or high-speed connections such as DSL, cable, or satellite. The vast majority of AAII members access the Internet using some type of broadband connection—89.8%, a significant increase over 81.6% last year.

Dial-Up Connection

For many, connecting to the Internet with a traditional dial-up modem probably harkens back to bygone days. For others, however, this is their only option.

Depending on where you live, there may not be providers of high-speed Internet such as DSL/ADSL and cable. Even if satellite Internet is available, the costs may be too high for some. If you fall into one of these categories, you will need to have a system with a built-in modem.

High-Speed Alternatives

High-speed or “broadband” connections offer data transfer speeds that are vastly superior to dial-up but, again, their availability is tied to where you live. Ranked in descending order based on data transfer speeds are cable, DSL/ADSL, and satellite.

For desktop users intending to access the Internet directly via cable or DSL/ADSL, or if you are considering networking multiple computers at home, a new PC will need a built-in Gigabit Ethernet connection. On average, a standard 10/100/1000 (1000BASE-X) Gigabit Ethernet card costs between $10 and $50.


Wi-Fi technology offers wireless high-speed access to the Internet using Wi-Fi–enabled devices such as PCs, cell phones, or PDAs. Wireless access points, or hotspots, have sprung up in almost every place imaginable over the last several years, from coffee shops to hotels and airports. If you are planning to buy a new laptop, make sure it has a built-in wireless network card so you can make use of these hotspots.

For those with broadband Internet connections at home, you can also set up a wireless network and use Wi-Fi to connect to it. In order to have wireless at home, you would need broadband Internet access, such as DSL/ADSL or cable, a wireless router to connect to your cable or DSL/ADSL modem, as well as a wireless card for your PC. Cellular phone companies—including Verizon, AT&T, and Sprint—are also entering the high-speed Internet market by offering Internet access over their cellular networks (where they are available). Notebook computer users can use wireless access cards from their respective cellular provider to connect to the Internet. There may be a fee for the card as well as monthly fees for access.


While not technically part of the computer itself, printers, like monitors, play an important role. It is highly unlikely that you can use a computer for any length of time without having to print something, whether it is an E-mail message, a Web page, a digital picture, or a price chart. Printers, just like computers, come with numerous options and issues to consider and have varying price points. Keep in mind that the quoted price for a computer system rarely includes a printer. This is usually something you need to purchase separately.

Inkjet Printers

Inkjet printers are the most common printers on the market today for the average PC users. They are inexpensive, reasonably fast, quiet, and achieve good print quality.

If you are spending the money for a printer, there is no reason not to choose one that prints in color. This is especially important if you want to distinguish between data on printed graphs with multiple lines or bars—often a concern when printing reports from investment software and information from the Internet.

You can find color ink-jet printers that cost as little as $30, but remember the adage “you get what you pay for.” For standard color printing, expect to pay between $75 and $150 for a good-quality color inkjet printer.

The real cost of an inkjet printer is the cost of the ink. Costing over $6,000 per gallon, printer ink is one of the most valuable commodities on the planet. At these prices, replacement ink can quickly exceed a printer’s initial cost. Sometimes, printers that are more expensive are actually less costly to run long-term because they often have higher-capacity ink tanks and separate tanks for each color (instead of multi-color ink cartridges).

Laser Printers

Compared to inkjet printers, laser printers offer superior printing speed and quality. While the prices of laser printers have fallen over the years, they may still be too high for the average computer buyer. Monochrome (black and white) laser printers start at around $100, while personal color laser printers start at around $200.


Security has become an important issue for computer owners, partly due to the number of hackers looking to steal your data and viruses trying to damage it.

Historically, Windows-based systems have been the favorite target of Internet vandals and pirates because most systems are Windows-based. One of Microsoft’s primary goals with its new Vista operating system was to address the security flaws that had hounded XP for years. To that end, Vista has improvements to protect your PC from viruses, spyware, and other malicious software with the Windows Security Center. However, it is still wise to take added precautions, including using an Internet firewall and up-to-date anti-virus and anti-spyware software.

The Mac operating system has had a much better security track record. Nevertheless, as Apple’s popularity and market share grow, Internet security experts warn that Mac OS X could become a target. In addition, stories are already surfacing that security experts are finding vulnerabilities in the new Mac OS X 10.5 Leopard. For the time being, however, the security services that are part of OS X, if used properly, should provide Mac users with a sufficient level of security.

For the rest of us, it is a good idea to take the necessary precautionary steps to protect our computers. This includes using firewalls and up-to-date anti-virus and anti-spyware software.


A firewall is a hardware or software device configured to control the flow of data to and from a computer. For consumers, a software-based firewall should suffice. The ideal software firewall should not only prevent hackers from gaining access to your system, but also stop suspicious programs from trying to send information over the Internet from your system. Comodo Firewall Pro (www.personalfirewall.comodo.com) is a highly rated personal firewall program that is also free.


If you plan to have your system connected to the Internet—receive E-mail, browse Web pages, etc.—we strongly recommended that you run an antivirus program and keep it updated. Many new systems will include trial versions of anti-virus software, but it is worth the investment to pay for continued virus signature updates even after the trial period is over.

Symantec’s Norton Antivirus 2008 (www.symantec.com) is one of the top anti-virus programs available when it comes to detecting dangerous malware. While the cost is slightly higher than many other anti-virus applications (around $40), it is well worth the protection.


Finally, you will want to have a program that takes care of spyware. The term spyware generically refers to software programs made by marketing companies that allow them to monitor your browsing activity, see what you purchase, and cause pop-up ads to appear on your system. The problems with spyware are that, first, you do not know they are on your system recording your activity and, second, they can adversely affect your computer’s performance.

One of the more popular anti-spyware programs today is Spy Sweeper from Webroot Software (www.webroot.com). This software not only detects and removes spyware on your PC, it also watches for and blocks new spyware before it installs. Spy Sweeper costs $29.95 and includes a year of updates.

Where to Buy

When shopping for a new PC, you can buy it either directly from a mail-order vendor or from a “brick and mortar” retail store. A few companies, such as Dell, Gateway (recently acquired by Acer), Hewlett-Packard (HP), and Apple, allow you to build a custom system and place your order on-line and have the system shipped directly to you (mail order). Likewise, these same companies and others make computers available at retail outlets such as BestBuy, Costco, CompUSA, Office Depot, Staples, and Wal-Mart.

Mail Order

Arguably, the biggest advantage with ordering a new PC through a mail-order company is that you are able to customize the system to get exactly what you want. In addition, due to inventory practices, mail-order companies are usually able to offer new technologies more quickly than retail companies, who usually have to move their existing inventory of older technology before restocking.

However, a major trade-off when purchasing mail-order is the lack of face-to-face assistance should something go wrong. Dell offers home installation service for $150 where a third-party technician will come to your house and set up your new PC. Furthermore, most mail-order companies include in a system’s purchase price one year of on-site service as part of any warranty. These two options should cover the majority of problems you may face—at least for the first year.

For repair service coverage over a longer period of time, many larger mail-order companies offer maintenance through third parties. Realistically, there is no reason to pay for service beyond three years. HP and Dell both offer three-year protection plans that cost $240 and $170, respectively.


Buying retail doesn’t necessarily mean paying more for a system that isn’t everything you wanted. Popular stores such as CompUSA, BestBuy, and Circuit City are very competitive with on-line vendors on price and usually offer a large enough selection for you to be able to find the system that closely matches your needs. However, be prepared to compromise your wants, and perhaps your budget, to fit the retailer’s offerings.

On the other hand, once you have purchased the system, it may be difficult to get a retailer to offer free consultation and technical support. BestBuy’s Geek Squad services include computer setup for $99 and diagnostic services ranging from $159 to $249.

System Recommendations

Table 3 summarizes the recommended specifications for buying a desktop computer today that will allow you to perform the most common types of tasks for the next few years. Given the rapid changes in technology that are taking place, one certainty is that what is top-of-the-line today may very well be relegated to mid-line in a matter of months. We realize that computing needs can vary greatly from person to person, and what we have offered here are merely our thoughts and opinions. The ultimate decision, however, is yours to make.

Table 3. Recommended System (Desktop)
Operating System Windows Vista Home Premium Mac OS X
Processor 2.0+GHz AMD Athlon 64 X2 Dual-Core, Intel Core 2 Duo 2.0GHz Intel Core 2 Duo
Memory 2G RAM 1G RAM
Hard Drive 320G 320G
Hard Drive 320G 320G
Video Card ATI or nVidia 128M, DirectX 10-capable graphics card ATI Radeon 128M 2D/3D graphics card
Sound Card integrated sound built-in audio
Modem 56K Built-in wireless networking
Network Adapter Integrated 10/100 Ethernet 10/100/1000 Base-T Gigabit Ethernet
Monitor 19" widescreen LCD 20" widescreen LCD
Price* $650 - $1,500 $1,248
*As of November 1, 2007.


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