Investing has always been a great way to grow wealth due to its ability to compound when investments are chosen wisely. However, with the advent of online brokerages and commission-free trading, it has become more popular than ever, particularly among those who may never have considered it before. This post will examine how modern tech-savvy investors are using the tools at their disposal to grow their money like never before.
Tech Is Assisting In Potentially Lucrative Investment Strategies
In the past, only those with a high level of expertise and financial resources could afford to gamble on strategies with an unknown but potentially high reward. However, as technology has advanced and new tools have made it to the mass market, even the most neophyte retail investor can now make investments of this sort and also revel in the profits they can bring. For instance, these UK spread betting brokers even allow those who put in the effort to make bets on the rise or fall of a stock without having to own the underlying stock (which has some capital gains benefits). When paired with automated portfolio solutions, this promises to deliver optimized exposures increasingly tailored to individual goals and risk tolerances.
LLMs are Revolutionizing Data Analysis
If you are already an active trader, you will likely have noticed the significant bump in stock price that many large tech companies have made after mentioning AI in almost every sentence of their quarterly report transcripts! This bump is for a reason, and while AI undoubtedly has incredible potential outside the realm of investing, it can also help those seeking to condense vast swathes of data into more manageable chunks. Data analysis is being revolutionized by large language models. These models are able to ingest vast amounts of financial data, documents, and news that previously would have taken many humans countless hours to analyze. The likes of OpenAI’s ChatGPT and Antropic’s Claude LLM models, and even an open source LLM can ingest enormous amounts of financial data, documents, transcripts, and news that previously would have taken countless hours or days to sufficiently analyze. This means you can extract highly valuable insights into how a company is doing and identify trends or anomalies that could ultimately help you decide which companies you want to buy.
Mobile Apps Enable Almost Anyone To Invest At Their Leisure
Mobile apps have revolutionized many things in life, not least of which is providing the chance for the common man or woman to invest their cash as they please with zero or negligible execution fees. Mobile investing apps have opened up investing to a much wider range of people by dramatically lowering barriers to entry and offering an array of tools they can use to find news and earnings reports on the fly. With just a smartphone, anyone can now easily open a trading account, deposit funds, and buy or sell stocks and other assets at their convenience. This democratization of investing allows those who previously found markets too complex or expensive to participate to take control of their financial futures. While there have been some rumblings around the way in which many of these so-called commission-free brokers make money (such as via payment for order flow), there can be no doubt that they have enabled on-the-go investing to the masses.
Investors Can Better Mitigate Risk Using Derivative Contracts
Spread betting was mentioned earlier in the post, but this is just one of the many types of derivatives that are open to modern investors depending on where they live. Investors of all stripes have increasingly looked to derivative contracts as a means to mitigate various risks inherent to open markets. Options, futures, swaps, shorts, CFDs, etc., are now available to those who want to take their trades to the next level. If you are cleared to trade these types of derivatives, you will be presented with a raft of tools at your disposal that allow you to hone your strategies to perfection. Whether you’re looking to place an Iron Condor for a limited risk/ reward ratio or choosing some version of the butterfly spread to increase your odds of making some serious money.
Moreover, technology now enables those with a high level of risk tolerance to leverage their trades with minimal effort. All it takes is a few clicks, and you are able to multiply the amount you can trade considerably. While there are always inherent risks to trading derivatives and using leverage, technology has made it easier to see how your bets might play out, giving you much-needed insight into whether or not you are willing to take the risk.
Investing has slowly become mainstream as more and more people can see the potential to make money and pad out their retirement nest eggs. Technology has been a significant part of this by making it more effortless to trade and even use derivatives to your advantage.
