Professional investors have relied on computers for years. Now, more and more individual investors are trying to gain the same high-tech edge.

In increasing numbers, people are plunking down $2,000 to $4,000 for the computer equipment and programs needed to sift through voluminous data to identify undervalued or overvalued stocks.

People also are hooking their personal computers to phone lines to tap into "on-line" data bases that carry financial information and to end-run their brokers by sending in trade orders over the computer.

The most valuable programs are designed to show large groups of securities, identifying those that appear to be undervalued or overvalued, according to Fred Shipley, associate professor of finance at DePaul University in Chicago. Shipley also is the editor of Computer Investing, a bimonthly publication of the American Association of Individual Investors.

Some programs, using monthly updates sent to the investor on a computer disk, will consider companies' stock prices, earnings, market values and capital expenditures to select the best investments. Various financial ratios, such as price to earnings or total assets to total liabilities, also will be reviewed.

Other software packages analyze specific financial and economic conditions, such as stock-price trends, and compare fixed-income instruments, options and futures, mutual funds and real estate. Some also consider tax planning.

But Shipley said he doesn't know of any software that helps determine the best strategy for choosing among different types of investments, such as stocks, real estate or bonds.

Financial and market information also can be entered into a personal computer by using a telephone connection. Charges to tap such streams of data are made by the minute or hour or by contract. Most services update securities prices every 15 minutes.

However, given that a long-term buy-hold strategy is generally the best for most individual investors, Shipley said, the need for on-line systems is not compelling.

"For the professional, this makes sense. . . . The small investor should probably just pick up the newspaper," Shipley said.

Other investors are avoiding telephone orders with their full-service brokers by signing up with on-line trading services. The orders are sent by computer directly to the firms' trading departments, which then execute the transactions.

But unless an individual investor is making many trades, such systems can be technological overkill, Shipley said.

"On active days, an on-line trading service might allow an investor to get his trade executed faster than if he tried to reach his broker," he said. "However, you generally don't save any money on commissions or get faster execution."

Still, Shipley said, a survey published in the latest edition of Computer Investing indicated that the number and sophistication of people using PCs for investing is on the rise.

The number of subscribers to Shipley's publication has shot up from about 4,000 three years ago to almost 30,000 today. Moreover, computer-investing clubs are springing up across the country, and new magazines and newsletters devoted to the topic are hitting the presses, he said.

Declining hardware and software prices are partly responsible for the growth in investing with personal computers, Shipley said.

Just as important, he said, is a "rising distrust" of Wall Street brokers and the advice they give.

"People are accessing professional data bases and generating their own information in order to check the quality of what they are getting," he said.

But does using a computer make you a better investor?

Shipley thinks so.

"By using a PC, an individual investor can approach gaining the same edge enjoyed by the pros," he said. "It allows a person to examine a lot more information and sample a far wider range of opinion over a shorter period of time than would otherwise be possible. If used carefully, a personal computer can help the investor make better decisions."

But he said that investors should choose their equipment and software carefully.

"Obsolescence is not an issue with IBM and Apple models," he said. "But in buying other computers, you have to ask yourself whether this company will be around in the next few years and whether the software for investing will be available."

Warning that "the investment-software business is still a cottage industry," Shipley said, "investors can find themselves relying on expertise that they have no way of judging."

About 200 software packages dealing with investing are available at any time, Shipley said. There is usually a 10 percent to 15 percent turnover in the programs listed in the annual Individual Investors Microcomputer Resource Guide, which the American Association of Individual Investors publishes each July, he added. The prices for the software tend to fall in two ranges, he said. Less-sophisticated software costs between $69 and $129, while more advanced programs cost between $400 and $500, Shipley said.

What's more, individual investors with computer experience can become needlessly enamored of on-line data bases that have expensive charges.

"Sometimes, this can become like a game. Investors will be spending money that cannot be justified based on the decisions that they made," Shipley said.