To say that the investment scene is undergoing a profound transformation at this point is probably an understatement.
Think about how quickly technology has advanced in recent memory and how the ripple effect has impacted virtually every industry. ChatGPT and similar AI-driven tools have become engrained in our daily lives. Believe it or not, that was only about two years ago – ChatGPT, in particular, only launched to the public at the end of 2022.
In the last decade, it’s truly been a combination of things impacting the investment world. Data analytics have made it possible to do more with the data we already have. Things like Skip tracing have made it easier for real estate investors to find off-market properties. Artificial intelligence has enabled investors to act on data faster than ever, all while freeing up valuable time to focus on more important matters. Machine learning helps investors understand market data and identify trends and patterns that likely would have otherwise gone undiscovered. The list goes on.
When combined, technological advancements like these are reshaping how individuals and institutions approach investment transactions. There are many examples out there, all of which are worth exploring.
Robo-Advisors are Leveling the Playing Field
One of the biggest ways technology has impacted the investment world is through robo-advisors, which have become increasingly popular over the last few years.
Robo-advisors are essentially tech-driven platforms that use algorithmic trading to provide automated investment advice to people. Many of the more advanced robo-advisor services also offer more robust portfolio management.
These are typically the types of things that you would pay a human to do, but here, they happen without human intervention at all.
Remember that at one point, advisory services were exclusively for high-net-worth individuals. After a certain point, you had so much money that you could literally pay someone to use their expertise to make you more.
Robo-advisors, on the other hand, essentially make that same level of insight and expertise available to practically anyone – dramatically leveling the playing field in the process. Not only are they a cost-effective way to begin your personal finance journey, but they also allow you access to more diversified investments than you might be able to take advantage of under other circumstances.
Blockchain Tech is Making Investing More Versatile
Blockchain technology has become a game-changer in the investment landscape, offering unprecedented opportunities and redefining traditional financial systems. Its decentralized, transparent, and secure nature makes it an ideal platform for innovation in the investment space.
One of the most notable advancements tied to blockchain is tokenization, the process of converting real-world assets into digital tokens that can be securely traded or invested in through a blockchain network. This approach allows for fractional ownership of assets like real estate, artwork, or commodities, enabling investors to purchase smaller shares of high-value items. For instance, instead of buying an entire property, you could invest a smaller amount, receiving proportional returns over time.
Tokenization democratizes access to asset classes previously out of reach for many, unlocking new avenues for portfolio diversification. This innovation also offers enhanced liquidity, as digital tokens can often be traded more quickly and efficiently than their traditional counterparts. Companies leading the way in this space leverage cutting-edge technology to ensure these transactions are seamless and secure, demonstrating the transformative potential of blockchain in modern investing.
Blockchain technology is reshaping how we think about wealth creation and asset management. It’s not just an evolution in financial systems—it’s a revolution that is empowering a broader range of participants to take part in the investment economy.
Mobile Trading Apps are Democratizing Access
Like blockchain technology, the proliferation of mobile trading apps is impacting the larger financial markets and making investing more accessible than ever.
Again, it’s hard to imagine this, but even as recently as 20 years ago, investing was a passive experience for just about everyone. You would sit down with a professional, devise a strategy, and provide them with the money you want to invest, and they would handle everything on your behalf. If something positive or negative happened, it would be a while before you learned of it.
Thanks to mobile trading apps, however, you can not only access real-time information and monitor your investments on the go, but you can do so without a middleman. This has also led to trading without commissions and put a wealth of educational resources at the fingertips of the average investor.
Technology is Opening New Doors to Investors
As we collectively try to make sense of this rapidly changing environment that we’re now living in, it’s essential to see these changes for what they are: an opportunity just waiting to be taken advantage of. Some in the investment community will see these as an obstacle. They don’t understand the usefulness of these tools because they’re such a shift from “the way things have always been done.”
Those people will be left behind; make no mistake about it.
But at the same time, it’s also essential to consider these changes within the context of things like risk management and your investment strategy. Something like artificial intelligence undoubtedly puts certain types of opportunities on your radar that you wouldn’t have had access to a decade ago. There will also be riskier situations in which you now find yourself. Striking a balance is the key to long-term success.
Ultimately, technology is not only enhancing investment opportunities across the board, but it’s empowering a new generation to engage with the financial world as they had never been able to do in the past. One thing is sure: when you consider how profoundly things have changed in even just the last five years, it’s exciting to think about what the next five (and beyond) will have in store for all of us.