Technology is fundamentally changing our relationship with money. Fact. What we do for entertainment, how we get from point A to point B and even the most mundane routines such as grocery shopping are exponentially changing, on a daily basis. We are also seeing substantial changes in our relationship with money, specifically in the way we manage our money. Daniel Kibel of CM Trading on tech and investments.
Technology and innovation has advanced in leaps and bounds, to the point where it truly is hard to ignore. The impact that advanced technology has had on the business and finance world has quite literally turned it on its head. One of the key areas where we are seeing such change is in the investment and trading landscape.
With revolutionary changes in the way people buy and sell assets on the financial market, as well as the way brokers conduct their business, technology has become intrinsically woven into the financial lives of most investors and traders. Investing is becoming available to everyone, meaning that anyone can trade and invest online because of the increased levels of transparency; with a click of a mouse people can get a clear and extremely in-depth view of what they are investing in.
We are also seeing a definite trend towards managed funds and automated trading systems, as well as a shift towards global investing. No longer are people confined to the borders of their own country when it comes to their investment choices.
The disruptive tech that is the internet
These technological advancements are fundamentally changing the way we are managing our money. Take for example access to the internet. The internet has without a doubt been one of the most disruptive technologies in history. This information highway has broken down all borders; now people can invest in international markets, and more importantly, international companies such as Amazon and Coca Cola.
It has had a profound impact on our lives and has created a major paradigm shift. With a literal smorgasbord of information right at our fingertips, the way that information is consumed and in turn used, has seen investors entering the market today with a host of options that were virtually unheard of 15 years ago. They can compare companies and products and have access to information such as quarterly results; all information that traditional brokers would have had to advise them on historically.
Because of this, online trading has now also taken on a life force of its own. We have smartphones, web and desktop platforms, online stock screens, market research sites and so on and so on; with a few clicks of a mouse or a few taps on your smartphone you can open a trading account. Investors can now fully enjoy the benefits of technology and the impact it has on their decisions. Information truly is power, full stop.
While headlines have been dominated by the rise of crypto currencies, high frequency trading and Artificial Intelligence, these advancements are just a handful of the technologies changing the investment landscape. Those new to investing can take advantage of copycat trading. This is literally when the trades of more experienced and successful traders is copied, making it easier for those not as savvy to make investment choices by eliminating the need for any research. There are charting materials too which provide online signals to follow, and then also automated bot ware which offers automated software which people can use to trade.
Social media for tech-savvy investors
Social media is an extremely powerful tool and is a literal treasure trove of data for technologically savvy investors. It plays a significant role in determining trading strategies and analysing trends and behaviours. Online connectivity and the ease at which potential investors from all corners of the globe can interact is allowing individual traders the opportunity to follow and get advice from investors who boast similar portfolios, all with a view to collaborative success.
One does need to demonstrate a degree of caution though, because as the old adage goes, all that glitters is not always gold. There are a lot of online choices that promise the world and more with a few quick clicks, so investors need to make sure that they are doing their research before committing to anything that seems too good to be true. Read what other people are saying about companies or schemes, be responsible for your own trading decisions.
Central to the development of many financially based technologies has been the rise of algorithmic trading. Algorithms use programme rules to analyse key investment criteria such as volatility, timing and trading volume, giving investors the edge to execute quicker and with less bias than human operators. Going hand in hand with algorithm-driven financial planning are robo-advisors – a class of financial advisor that provides investment advice online with very little, or no, human intervention.
Both of these technologies, while easy and convenient, really only work for as long as they work. For example, if an algorithm is so good, it will soon start to become so big that it will in itself affect the markets. At a certain point it will attract too many investors and its original reason for success will become null and void. In my opinion, technological advancements can continue to become more and more innovative, but at the end of the day, the human elements is what is critical when it comes to making any investment choice.
As technology makes investing that much more accessible to the average investor, tools have been developed to allow the smallest of investments to be made. These passive or low touch investments can bring in a tidy sum, if traders don’t over leverage. Investments can always go in either direction, but there are numerous traders making huge money from well thought out, realistic investment choices. You can make 100% back on your investment, you can make 1000% back, but it’s always pertinent to remember that the more potential profit there is to be made, the higher the risk is. As long as you stick to certain rules and keep your finger firmly on what you are doing, there is no reason that you shouldn’t have success.
Beware the unscrupulous…
As with everything, there is an upside and a downside. It is truly up to each one of us to make sure we are taking the good that technology is offering, in terms of investment tools, and not be blinded by the bad. We have the opportunity to extract reams of information that can influence our choices, the technology to support these choices. We should use this to move forward without falling into the trap of people who are making a quick buck on unscrupulous trades.
When you open live trading accounts with CM Trading, Africa’s largest, award-winning local brokerage, you can freely enter the financial markets and seize numerous opportunities, all supported by progressive technologies. Enjoy advanced trading conditions, educational packages tailored to your individual needs and trading styles, as well as exceptional trading platforms. There are a range of options to suit every single trader’s needs; from those just entering the market, to those who are proficient in trading and investing.