By Jacob Wilson on Aug 15, 2019 8:44:00 AM
Technology has made investors’ lives far easier.
In the past, you needed to do research on your own, handle mountains of paperwork, and classify and analyze the data you collect manually.
Today, with the help of the right tools, you can go paperless and streamline almost any aspect of the investing process.
This is especially important if you’re just entering the investing waters.
Here is how tech advancements can help you.
Banking and budgeting apps streamline your finances
Before you start investing, you first need to learn how to control your finances. In the past, tracking your incomes and outcomes was extremely complex, as it required solid budgeting skills and entering the financial data manually in Excel.
Given that, it’s not surprising that budgeting apps are becoming a must for anyone wanting to improve their personal finances. Research says that 63% of smartphone owners have at least one financial app on their phones.
Today, there are many budgeting apps that help you break down your personal finances easier and improve them in the long-run. Personal finance mobile apps like Mint, PocketGuard, or YouNeedABudget are easy to use and customize.
One of the most significant features of budget apps is the simplified and real-time tracking of your finances. Namely, they will categorize the transactions from your banks, credit card issuers, brokerages, and so forth, making your balances easier to track. You can even set a credit limit and get notified when you go over budget.
Investment screening helps you make better decisions
There are many investment screening tools you can use for screening your funds, stocks, and bonds. With these platforms, you can do your research on your own. Namely, you can customize filters and choose how you want your data to be displayed.
One such tool is Bullsboard that lets you add stocks to your watchlist and provides you with the detailed information and current price about them. This tool lets you set up numerous watchlists and add as many alerts as you want. Most importantly, if you’re buying or holding stocks, you will receive real-time notifications about price changes.
One of the greatest problems related to investment screening tools is that you need to know how to input and interpret your data. Remember the adage used in the IT world – garbage in, garbage out. In other words, the input is far more important than the output. Therefore, if you don’t know how to set your filters and track your data properly, the results you get will be faulty, too. This is also where tools like Bullsboard can help, as they offer pre-designed filters to set according to your general objectives.
AI takes trading to the next level
Artificial intelligence has been already changing almost any aspect of your lives. And, investing is no exception. There are a few ways it may help you improve your investing and trading strategies:
- It helps you understand key data patterns
No matter if you’re investing in stock markets or you decide to trade currencies, you should keep in mind that these fields are extremely complex and volatile. With the help of artificial intelligence, you can minimize the investment risks, as it lets you identify critical historical patterns. For example, predictive analytics tools will analyze the past trading trends to help you predict your trading outcomes and detect the potential problems on time.
- Highly customized investing and trading experiences
Today, 35% of traders are doing their research and finding brokers on mobile devices. Let’s look at forex trading, where mobile trading has been gaining momentum over the past few years. Many forex brokers are focusing on improving user experiences. Some forex brokers like Ever Forex decided to create their own online trading platforms to provide seamless trading experiences across multiple platforms.
- You can understand market sentiment
Sometimes, making investment decisions is not all about data. You also need to pay attention to other traders’ feelings, experiences, and attitudes towards a certain form of trading and investing. And this is where AI can help, as it lets you analyze a great number of data from thousands of online resources. Such tools will tell you whether the market sentiment is positive, negative, or neutral, helping you choose where (not) to invest.
Making smarter asset allocation decisions
When starting out, you will want to know how your income would increase based on the asset allocation choice you make. Simply put, asset allocation simply means that you as an investor, need to allocate your cash into different investment options like stocks, bonds, etc. The idea is to combine these investment sources so you can grow your investment ROI and minimize the investment risk.
And, when allocating resources, you need to invest in the right tools to back you up.
For example, Portfolio Charts lets you combine up to 12 calculators to create a highly customized portfolio. Each of these calculators offers a detailed insight into a certain aspect of your asset allocation option. This way, you can estimate your rate of return, the time to financial independence, the withdrawal rate, risk tolerance, and so forth.
FIREcalc is also one of the most popular investment tools as it prevents you from facing the worst-case scenario. Namely, you need to enter your spending data, current savings, and asset allocation and, based on these figures, the tool will tell you how well your portfolio would perform in different economic scenarios.
When used properly, these tools will help you get the most out of your investments and reduce risks. However, don’t forget that they work based on the data you provide. Therefore, the analysis results you get maybe just a part of a far broader picture you’re failing to see. To make your decisions more accurate, consider running these tools multiple times and entering different data about contributions, inflation, investment ROI, etc.
Technology advancements are making the lives of investors far easier. They let you monitor your financial state effortlessly, allocate your assets wisely, predict your ROI and, above all, reduce the risk of failure. You just need to set clear goals and choose the right tool accordingly.
Still, when using online tools, consider your online security, as you will need to give away lots of your sensitive information. This data can be easily re-purposed, so ensure that it is protected properly.
We hope this information helps you in your investing journey!
Jacob Wilson is a business consultant, and an organizational psychologist, based in Brisbane. Passionate about marketing, social networks, and business in general. In his spare time, he writes a lot about new business strategies and digital marketing for Bizzmark blog.