5 Ways Technology Can Improve Your Investment Strategy
Imagine walking in a bakery and buying a box of doughnuts. The persona behind the counter gives you a bill and the many modes of payment. You swipe your card, pick up your package, and walk out. No physical money was exchanged, yet a successful transaction.
This is because the transactions were between your bank and the bakery’s bank. Technology, digitization, and automation have made all financial transactions smoother than ever. The same is also true for investment strategies.
The reason more and more entrepreneurs are investing in technology startups is no surprise. The growth and utilization of fin-tech remain exponential over the last decade. Research by American Express shows that over 19% of all investments come into information technology. This number will only grow further as we make our lives more digital.
The Need For Technology
Firstly, technology is a massive time-saver. When was the last time you went to a physical bank to seek information? Innovation has made better investment opportunities more accessible and faster.
As more and more people lean into making technological changes, it will force the whole ecosystem to catch up. Both internal and external communications are getting better with technology too.
Lastly, it’s become the need of the hours. The whole world is walking around with high-processing computers in its pockets. All fields, including financial investments, need to up their game and adapt to the new world.
5 Ways Technology Can Improve Your Investment
1. Information and Communication
This is one of the most apparent advantages of tech evolution has been the ease with which we can communicate and share information. Step one to making sound investments is by learning about them and making the right choices. This is much easier with tech platforms and online mediums.
Information about investing strategies is readily available online for free. Anyone who finds themself lost can discover abundant details on each topic. Regulation and laws have also made it mandatory to keep risk information and disclaimers available for investors.
Secondly, if you wish to enhance your profitability, you will have to work with a financial advisor or an investment platform. This is particularly necessary if you are working with a large fund or multiple funds. Tracking tools and communication channels have made it very easy to keep a check on all of this.
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An investor remains up-to-date on the market daily. They can also specifically look into their portfolio and track investments in real-time. Communication works both ways; you have a channel to ask your brokers, agents, and platforms. They can also reach out to you with opportunities and advice.
2. Consider the Long-Term Options
Since the boom of tech in stock and options investments, it’s become much easier to track long-term investments. These are investments that are left to grow over a period of many years. Unlike trading, the reason for purchase is not to sell after a cost surge — but to allow the money to grow slowly over time.
Some investments also provide dividends for these long-term investments. Technology has digitized the whole process making it easier to ensure progress. If you see your investment turn dormant, you can move it to a better fund. The platform also sends reports to ensure progress.
3. Better Security
When was the last time you worried about an online transaction? Be it online shopping, or following up with your bank — all of these processes now occur online. There is hardly any doubt that technology has provided a strong safety net to us all.
All your investments remain safe behind gateways and firewalls. Technology can enforce the safety of both your fund and your data. Worries like theft are non-existent with the lack of any physical entities.
Additionally, technology has helped us keep your data safer with innovations like two-factor authentication, biometric scanning, stronger password regulations, and much more. These technologies further enhance themselves with regular software updates.
4. Planning Tools
The generations of today are a lot more aware of investment options and have the availability to plan better. The technology of today has been the brainchild of budgeting tools, market-analytic tools, interactive maps and charts, and much more.
There are many automated tools that conduct complex calculations in just a few minutes. One can merely enter numbers and their type of investments — the sophisticated system will calculate all the details.
There are also headline trackers that run on artificial intelligence for targeted results. Suppose you wish to follow all the news about a single stock or a business; the phones of today can ensure you never miss an update.
The next step is machine suggestions. Based on your past investments, an algorithm can make suggestions and recommendations for your next investment strategies.
5. New Avenues of Investments
Apart from awareness, technology has also given rise to new channels of investment. One of the biggest examples of this is cryptocurrency. This type of investment sounded unrealistic and futuristic a decade ago. Today anyone can put money into a digital ledger and own a digital-unregulated currency.
The modes of investment are also noteworthy. For example, placing your money in stocks, real estate or any other domain is possible from home. With a click of a button, you can buy property on the other side of the globe.
Even geographical borders remain blurred as anyone can make investments online.
The constant evolution of technology is unpredictable. What is certain is the ease they will bring to our lives. The generation to follow will find it much easier to pick-and-choose investing options. Maybe automation will become much faster and easier.