The world of investment has changed. Gone are the days of phoning up your stockbroker to make an investment for you. Instead, there are apps at your fingertips to do that for you. And if you are a beginner investor, then the emergence of AI and automated investing could well be a game-changer.
How can beginner investors benefit from technology?
Smartphone trading apps and online platforms mean that pretty much anyone can start investing. But as we all know, investment carries risk. There is a real danger that you could lose money, rather than make it.
But in the 21st century, where technology is king, beginner investors can use this to their advantage. The emergence of artificial intelligence (AI) can help to identify biases and unconscious behaviour. Therefore it is basically helping to train an investor’s mind.
So instead of learning the hard way by losing a chunk of money, technology can help soften the blow. It can make investing seem less intimidating.
Is there still risk?
Investment is not without risk. All that the technology does is add some safeguards for beginner investors.
London-based fintech investor in Capital.com, Viktor Prokopenya, explains, “In attracting investors, it is important platforms protect new users with ongoing training and innovative intelligence.
“For example, one company I invest in, Capital.com implemented a negative balance protection feature before this was required by regulators, meaning users cannot lose more than is deposited in their accounts, no matter what they do.”
Mr Prokipenya added “In attracting new investors, we, as fintech entrepreneurs, must also help educate the next generation of investors. The team at Capital.com has worked hard on this, including developing Emotional Quotient (EQ), which uses artificial intelligence to identify biases and unconscious behaviour, helping traders to essentially train their minds.
“AI analyses performance and makes data science-led recommendations. It works with investors to help them become better traders by highlighting up to 25 biases and mistakes, and suggesting how to overcome them.”
So AI and technology cannot remove the risk element of investing, but it can help educate beginner investors. They can then understand the mistakes they make and avoid them in the future.
Is technology the way forward for investors?
While innovative fintech products are definitely attractive, there are other factors at play when choosing an investment platform to suit you. Yes, robo-advisers may seem cutting edge and AI capabilities may be dazzling. But if the portfolio isn’t diverse enough or the dealing fees are too high, then none of that matters.
That’s why it is important to look at the whole package. Our MyWalletHero comparison pages for share dealing platforms and investing solutions look at the big picture. We focus on what you can expect to pay in platform fees, dealing fees, fund charges. We also look at user-friendliness and any cutting edge technology integrated into the platforms.
What you will find is that there are platforms out there suited to beginner investors. And once you start to grow in confidence, there are also investing solutions to take you on to the next step of your investor journey.
