4 Ways Technology Has Changed the Investment Game

Image by David Schwarzenberg from Pixabay
3 years ago

These days, technology has allowed investors to be as informed as ever. Not to mention, small investments (like trading stocks) are accessible to anyone with a smartphone and an online bank account. Generally, this is a good thing because of the lower entry barriers and transparency about each investment.

However, the internet and social media have also allowed for the rapid spread of misinformation regarding investments. Unfortunately, this often leads to poor decisions made by inexperienced investors. In this article, you’ll learn precisely how technology has changed and continues to change the investment game.

AI for investment research

AI (artificial intelligence) is software that can analyze a given set of data and structure that data into specific insights and conclusions. AI has been tremendously helpful in investment research. It can take loads of data, such as market fluctuations, stock purchasing trends, Google search trends, and general chit-chat regarding specific investments found on the internet, and draw insights from it. All of this data combined can be of very high value to any potential investor, but without the help of AI, it can be almost impossible to collect and interpret it.

This means that because of AI and how easy it is to interpret large sets of data, investments can be as transparent as ever, and it’s much easier to get a clear picture of how attractive a specific investment is.

Online stock brokers

In the past, anyone who wanted to invest would need to set up an account with a brokerage and then call the brokerage every time they wanted to buy a stock (plus, they’d need to pay a set interest rate to the broker for each purchase). This made it difficult or nearly impossible for many people to take up investing. Not everyone used to have a phone or the time and money to set up an account with a brokerage.

Well, times have changed, and stock brokers have moved online. Today, pretty much anyone can set up an online account and start investing for free. There’s usually no minimum amount to invest. You can start by simply investing 20 dollars for practice and then monitor and adjust your investments as you move forward.

Social media

Social media has made it possible for information to travel as quickly as ever. It’s no secret that people like to copy other, “smarter” people, especially when it comes to investing. Well, this can be both a good and bad thing. Following experienced investors online can help your investment game a lot because of the valuable information they have to offer. However, never make the mistake of blindly following the advice of just one or two “intelligent” people online (which is a mistake that many people make).

For example, just one tweet from an influential person can lead to thousands of people buying a particular stock, even if that information is false. This influx in purchases then leads to a rise in the stock’s price, which in turn encourages more and more people to buy it because it is more “valuable”.

Any smart investor would know that this is just a hoax, and the actual value of the stock has not gone up. So, you need to do your own research and base your investment decisions on lots of different sources because social media can be very deceptive.

Mobile devices

If you have a smartphone, investment is literally always at your fingertips. You can read up on the news, buy stocks, manage your portfolio, and speak with financial consultants almost at any time, anywhere. Whether you’re a 19-year old broke student or a millionaire: you both have pretty much the same smartphone and the same technology. It’s just a matter of how (or if) you choose to use them.

Bottom line

Now you know how technology has transformed the investment arena. No matter how rich, poor, young or old you are, you can climb up to the top of the investment game by taking advantage of all of the technology at your disposal.

Of course, you need to be careful and look out for misinformation online (and there’s a lot of it). Just keep on reading the news, take free online courses, follow successful investors, and start practicing investing with just 20 dollars if that’s all you can spare. Investing is as fun and easy as ever, and the beauty in it is that you can start right away by downloading an investment app to your smartphone!

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