Investing may conjure up images of big-shots in fancy suits, strutting amongst the high rises of the City. But the development of innovative financial technologies is allowing investment to be brought to the masses. Here, we’ll discuss a few ways that new fintech can help you to invest smartly and effectively.
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Social Trading Networks
It was only a matter of time before one of the twenty-first century’s greatest innovations, the social media network, became integrated with financial technology. Now you can connect with top investors and amateurs alike on a social trading platform like eToro or CMSTrader.
All users have profiles where they can connect, as well as see each other’s stats and investment portfolios. This allows you to compare your investment decisions to those who are acheiving a better return, and adjust your strategy to learn from the masters. You can then develop yourself into a seasoned investor, and others will start learning from you.
The social aspect of the platform allows for instant, widespread communication. Investors from around the world can instantly spread news and advice amongst each other, ask questions and share in their success.
Get Yourself Robo Advisors
A robo advisor is a modern alternative to a wealth management firm, designed to be more affordable, more efficient and more dynamic. Robo advice minimises the human element, using smart software and computer algorithms to automate the generation of good investment strategies. Popular Robo advisors include MoneyBox, MoneyFarm, Wealthfront and Betterment.
Users of the robo advisor’s platform build a profile detailing their various investment and risk preferences, which is then fed into software that will develop an investment plan specifically tailored to their needs. Users can then manage their investments online, including on a mobile device. The removal of the need to go through a human in the middle allows for faster adjustment of your strategy, as well as reduced fees.
Hitch a Ride on Crypto-Mania
Since currency trading has always been a very tricky and high risk venture, it was long reserved for only full time financial professionals. Now however, the rise of digital crypto currencies like Bitcoin, Ethereum and Litecoin has seen millions of ordinary people all over the world making a tidy sum from currency investment.
Crypto currencies operate completely digitally, with no state or centralised control, via a technology called the Blockchain that allows for every online transaction to be recorded in a way that prevents fraudulent duplication. Innovators have become extremely excited about the prospects of this financial technology, which has seen the value of the digital coins shooting up.
The value of BTC (Bitcoin) rose to a staggering $20,000 before dropping back down to around $12,000. Since then, BTC and other crypto currencies have been fluctuating, allowing investors to make money off the ups and downs. But beware: staking your money on these currencies is still extremely risky, and is not for the faint of heart. Many investors still believe that the rise in value of these technologies is merely an unsustainable bubble.