Technology has always been at the center of investing. Since the inception of Information Technology (IT), it has supported a drastic shift in the investment landscape.
For example, thanks to IT it is possible to conduct transactions for a very small transaction fee. This has enabled people with smaller investment portfolios to enter the space and start trading. In this sense, you could argue that IT is democratizing investing, and allowing everyone to participate. On the other hand, there is still the element of knowledge and expertise that is holding people back. In this article, we will look into how technology is helping revolutionize trading for the average retail investor.
IT can also help to manage portfolios of stocks. Naturally, your stocks are part of one or multiple broker accounts, but you can also use a portfolio management application to bring it all together. This helps you to have a complete overview, which is different from the likes of a spreadsheet.
A good example is the Delta stocks tracker. This application provides you with an overview of your stocks combined with analytics and market news. This results in a one-stop-shop for investors. They even allow you to trade through the application with the largest brokers. You can see an overview of the transaction costs per broker, and select the one that suits your preferences.
Exchange-Traded Funds (ETFs)
This is not often seen as revolutionizing by current-day investors.
However, the idea of purchasing funds with very low management fees has only emerged in the last five to ten years.
Before that, funds were typically managed by hedge fund managers and banks. This resulted in hefty fees, which made the products less attractive. Next to that, they also underperformed compared to indices such as the S&P 500.
The new generation of ETFs also includes trackers that follow the S&P 500 and other major indices such as the MSCi World. Since they simply follow a tracker, the fees are significantly lower which makes it an attractive investment compared to the traditional managed funds. You also have less risk for personal preferences that hedge fund managers might have.
Trading Through Bots
For retail investors that want to be more active, they can also use bots to trade. These bots used to be available only to professional investors due to their complexity and expertise required. Nowadays, you can purchase bots as a service and leverage them to trade based on your parameters. This is helping retail traders to get a foothold in the market and make a profit. The complexity and pricing of these bots differ per the needs of users.
Crypto is Even More Accessible
Retail investing should also include crypto. This new type of asset is even more accessible to retail investors. There is less information needed from people, known as the know-your-customer (KYC) process, making it easier for people without identification to trading. This is a vast market within Africa and Asia, which is now able to trade and grow their wealth over time.
For example, in the QUASA blockchain service for remote orders, both clients and performers only need a crypto wallet, such as Metamask or Trust Wallet.
The new crypto-settlement tools in QUASA democratize access to services traditionally tied to fiat money and banks, and open up opportunities for hundreds of millions of people.
By connecting your crypto-wallet, a freelancer or customer instantly settles among themselves using the Quasacoin (QUA) cryptocurrency.
You are not tied to any country, nor to the currency of any country, nor to banks, nor to payment systems, nor to the need for conversion and difficulties with banking operations, nor to absurd commissions and surcharges, nor to paperwork, there are no certificates , no "big brothers", no intermediaries - there is only a customer and a performer.
However, there are certain limitations such as KYC that are needed at crypto brokers.