The Impact of Technology on Investing

Researchers have tried to define technology from different aspects that include its components. Technology has two essential components; a physical and informational component. The physical component of technology revolves around the products, tooling, equipment, techniques, and processes. The informational component consists of managing functional areas, marketing, production, quality control, reliability, and skills. Generally, technology is considered a wide dynamic.

Best Tech Gadgets

Technology has facilitated the improvement of various aspects of the world that cannot go unnoticed. The Technology has affected the time, costs, and quality of these aspects from education, communication, space, and security sectors. Technology is here to stay as it has been made part of our daily life. The importance can be seen. Technology has been able to shape the business world in terms of investing.

Also Read: How technology affects education negatively

Technology and investing

Modern-day investing has been transformed by technology trends in the digital age. Technologies such as the development of cryptocurrencies, high-frequency trading, and artificial intelligence have been witnessed and characterized investing. Unlike before, today stock traders can access a lot of information and improved trading tools when investing. Notable investment trends brought by technology include:

  1. Creation of big data

Retail traders, banks, and hedge funds have used big data to manage their portfolios. They are also able to provide their market sentiments and give predictive analytics for a potential investor. By this, an investor can search online and find data for an investment firm interested in engaging. For instance, a company like Inovio Pharmaceuticals has compiled data labeled INO earnings that gives the earning dates, history, and possible estimation on future earnings for the company. When a potential investor or shareholder comes across such information, they will make an informed decision based on the data. Investing firms can also convince the public of their firm’s consistency and being the best firm for investing.

  1. Computerized terminals

Terminals are simple keys that analysts use to inquire about stock quotes. Technology has overseen the advancement of terminals to being computerized. Today advanced terminals can be uploaded to any computer with cloud-based software, making them more secure for investors.

  1. Invention of circuit breakers

Circuit breakers were majorly used for stabilizing the financial markets. Circuit breakers control panic selling on an exchange or security by temporarily halting trading when the prices are volatile to avoid a market crash caused by dropped prices. In the current digital times, investors are always on the look to buy shares from companies considered to fetch a good return. They will rush to purchase shares when the prices drop, intending to sell them when they are high.

  1. Electronic stock exchanges

Before technology, stock traders would crowd in exchange for firms building to buy and sell. To date, traders can bid and post offers digitally from any place. It favors everyone, including small investors who can trade in small volumes online.

  1. Online trading

With online trading came the need for brokers. Initially, an investor would make calls to trade with full-time brokers and financial advisors, incurring the cost of commissions on completed orders. Technology has enabled brokers to have online platforms to pass the information on updated stock prices to investors and facilitate stock trading.

  1. Smartphones and personal finance apps

Smartphones have been able to improve communication between investors and traders. Also, through apps installed on smartphones, investors can track their investments and personal finances.

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  1. Social media

Social media is a crucial source of data for investors. From here, investors can access important news on the global markets and take action. People relied mainly on traditional mediums such as newspapers, television, and radios for news. Today, one can get instant news of what could be happening in the global financial markets on their smartphones. One doesn’t have to look for a television to watch programmed news programs as they could easily access the news on social media platforms for the news providers.

Potential risks?

According to Forbes, as technology advances for the modern investor, it has brought cyber and resilience risks. Also, the uncertainty associated with technology firms for investment makes it hard for them to get startup capital to begin. With many fraudsters cases and cybercrime on the internet, most investors have developed a phobia for engaging technology-based firms online. They have the perception of the possibility of being scammed. Investors have the responsibility of doing thorough research to confirm the credibility of a firm before engaging.


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