The old world of investing used to be quite tedious and inefficient. Retail investors were limited to daily newspapers to look at stock prices, and opening or closing a position usually meant having to call your broker on the phone. Fast forward to today, the modern investor has, within his/her fingertips, access to hundreds of stocks and other financial assets. With a few clicks of the button and swipes of the screen, one can learn everything there is to learn about an investment opportunity.
DIY Educational Tools
Robot advisers not only handle the direct selling of products to retail clientele; they also help improve the level of understanding and financial literacy of investors through do-it-yourself educational material. In the past, investing was left mostly for the well-educated degree holders who have a high proficiency in Finance, Economics, or other related industries. Today, the proliferation of investment material on various websites, blog posts, and tutorial videos enable anyone and everyone to invest their own money.
Social Trading Platforms
Social trading platforms, like eToro and ZuluTrade, serve as a social environment that gives investors the ability to interact with like-minded people in real-time. It enables first-time traders to open and close positions with the knowledge and recommendations acquired from other more experienced traders, giving them a better shot at actually making money as opposed to blindly taking positions. A social trading platform comes with all the tools and functionality of a regular broker platform, but with the added feature involving a list of highly rated and followed traders. You can either manually follow their investment positions or automate it so you can avoid manually having to keep on track of your portfolio.
Wealth Management Softwares
A wealth management software that’s effective will help people evaluate investment portfolios and make recommendations on how to produce maximum return on investment. You can connect existing investment accounts onto your account, which will then be analyzed for potential improvements. Both individual retirement accounts and taxable accounts can be connected to your wealth management program. To start analyzing your investment accounts, softwares may ask for your age, risk profile, and other relevant financial factors.
It’s impossible to keep track of all stocks out there. A stock screener can simplify the process of searching through the mountain of publicly traded stocks using a predefined or customized criteria that filters possible choices. For instance, stock screeners, like Finviz, can return all publicly listed companies that have a market capitalization of less than $1 billion, is in the healthcare industry, and has had positive dividend yield for the past five years. The criteria used by investors usually vary based on the specific investment strategy they are using, whether it’s long-term investing or day trading.
Virtual Trading Apps
Being able to simulate the high-stress and fast-paced environment of investing is invaluable to any investor. Apps, like Stock Trainer, give people the ability to test out their strategies and immerse themselves in trading without the real-world risks of losing money. These trading and training applications are mostly free of charge and easy to download and install, which means there’s virtually no risk in trying them out.
The digital innovations in the financial sector, namely in investing, are not without its flaws. These technologies may serve as a double-edged sword, but knowing how to wield them can help the investor maximize returns on their investment while minimizing the potential financial losses. Furthermore, keep in mind that these are just five of the many innovations that are making an impact in the investment landscape. Technologies, such as automated investing and cryptocurrencies, are also worth taking a closer look into.