Ask any seasoned investor about age-old tricks to derive profits from investments and their simple answer would be, there are none! This is because the strategies, which an investor used to use a decade back, do not hold any relevance in modern times.
The advent of digital platforms and advancements in technologies can be attributed to leading the change. However, a more fundamental change has been observed in the nature of the industry, the products, which are invested in, and the investor expectations from the same.
In this article, we will try to zero in on the art of investments. We will discuss how investors can continue to ensure profits even if the financial markets keep changing.
Has Digital and Tech Advancements affected the Trading and Investing World?
Do you remember how you used to use logs, journals, and certifications to trade on the stock market? Buying shares and commodities used to be a harrowing experience.
Save for a few people who did this in terms of their jobs, the vast majority of us kept a good distance from this world.
Cut to 2020, and buying stocks or investing in cryptocurrencies happen from an app on your smartphone. There is certainly a belief that technology has enabled more and more people to start engaging with investments.
Tech advancements like Artificial Intelligence and Machine Learning have made it easier to predict trends, spot opportunities, and make projections. All this is of crucial value in the world of investing.
The best investors are now letting science and technology take all their investment decisions for them. In other words, Data is being used as a powerful vehicle for making investing decisions.
The Advent of New Financial Assets and their Impact on Investing
The field of investing has seen rapid changes ever since newer financial assets like cryptocurrencies started emerging on the scene. Bitcoin and other cryptocurrencies saw a new wave of traders and investors cashing by join bitcoin circuit today in a major way.
Using technology and data to understand how crypto valuations work led to the entry of a new group of data scientists and mathematical experts in the arena of investing. Gut feelings have been replaced by complex mathematical models.
Like cryptocurrencies, the emergence of ‘Start-up’ in different industry niches also added an extra investment opportunity to the mix. Investors could now choose between-
- Start-Up Equity
The increase in alternatives opened up newer and more promising avenues for making profits. This also helped investors in diversifying their portfolios and spreading out the risks.
Active investment is on the rise as compared to Passive Investments some years back. There is an urge to shift investments, grow them, and then re-invest them, all within a short span of time. Millennials have been credited with introducing this new style of trading and investing.
How to Profit as an Investor in Changing Financial Markets?
Investors, which have been successful in engineering profits state that budding investors should always try to follow the below-stated points-
- Betting on Technology-
As an investor, it is important to always invest in emerging technologies. Areas like Blockchain, AI, ML, Big Data, and AR are some areas, which are going to define the future of our world. Investments in such fields are always going to yield rich dividends.
- Engaging with Cryptocurrencies-
If you are still considering investing in Bitcoin or other cryptocurrencies, you have already missed the bus. Bitcoins are the future of our financial world and investing in the future is going to help you reap all the dividends.
- Using Science to guide your Decisions-
Going forward, it is best to let data science guide your decision making in terms of investments. Breaking down data gives rise to several crucial pieces of insights, which can help an investor take informed and calculated decisions on their investments.
The Bottom Line
Even though we began the article by discussing the art of investment, by now you must have gathered that it is more about science and technology than it is about art. Can you think of some more points to add to the list?