Jun 19, 2024

Image: Unsplash/Joshua Mayo

Recent advances in technology have transformed the way we access and assimilate information, enabling us to make data-driven decisions that allow for greater predictability and precision. From artificial intelligence (AI) algorithms that can analyze large data sets on customer experience to machine learning models that can forecast market trends, the insights and clarity gleaned from these tools have revolutionized the business landscape.

Many of these technologies can also be used in the investment arena to help investors manage their risk and optimize their returns. In this article, we will take a closer look at some of the ways technology can be leveraged by investors to inform and execute their investment strategies.

Robo-Advisers

These digital platforms can provide automated investment advice and services to investors without the need for financial advisers,  investment managers, or any other type of human intervention.

Robo-advisers use algorithms to gather information on investors’ risk tolerance, finances, and investment goals through an online questionnaire. With this information, robo-advisers automatically create and invest funds into a portfolio that contains assets tailored to the individual’s investment profile. Beyond portfolio management, robo-advisers can also monitor and automatically rebalance portfolios to ensure they maintain the allocated level of risk and can preemptively adjust portfolios based on predictions in market trends.

Investment apps

Investment apps can empower investors in their investment decisions and portfolio management through the convenience of their mobile devices. Through these apps, investors can receive news and analysis, and real-time data and alerts on asset prices in a range of asset classes such as stocks, bonds, cryptocurrencies, and precious metals. This enables them to better time the market and optimize their investment decisions. Some of the features offered by investment apps include the following:

• Market analytics: These apps offer in-depth data analysis and interpretation to offer investors meaningful insights on specific markets,  helping to inform their investment decisions.
• Stock screeners: Through these apps, investors are able to filter through a vast array of stocks based on their specific investment criteria. Stock screeners such as those offered on AlphaSpread can greatly simplify the process of identifying stocks and potential investment opportunities, enabling investors to make more efficient and informed investment decisions.
• Account management: These investment apps enable investors to create and manage personal investment accounts such as retirement accounts or brokerage accounts more efficiently. Through these apps, investors can keep track of their investments and make adjustments where necessary.

Software Tools

Investors can leverage various software tools to help them improve their investment decisions and portfolio management. These include:

• Portfolio analysis software: This can track the performance of a portfolio and benchmark it to others in the market allowing investors to adjust their investment strategies accordingly.
• Risk management software: Investors can measure their level of risk and view the impact of various strategies and events on their portfolio by running simulations. They can also limit their exposure to risk by setting alerts and limits on their portfolios.
• Asset allocation software: This software tool can help investors optimize their asset selection according to their preferences, goals and risk tolerance. Customized portfolios can be created and automatically rebalanced based on these criteria.

By leveraging these technologies investors can avail themselves of a range of benefits that can improve their decision-making, reduce their risk, and ultimately, optimize their returns.

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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• Source: https://ncfacanada.org/leveraging-technology-to-enhance-your-investments/