Technology has transformed stock market investing. Thirty years ago, the process was much slower. Buying and selling shares took days. Investors needed brokers to trade in person. Now, investing in the share market has evolved. People are more aware of their finances and the importance of investing.
Inflation and technology have shifted investor preferences. Today, people realise inflation erodes money. To protect capital, returns must exceed inflation. Moreover, the fast-paced world leaves no time for manual tasks. Technology has made investing easier and more accessible.
Changing The Situation
Today, numerous tools make investing easy and enjoyable. Mobile apps like the Aditya Birla Capital App let us monitor portfolios on the go. Online platforms enable buying and selling at our convenience. Additionally, we have access to research tools, algorithms, and real-time data.
These advancements empower retail investors to control their finances and earn extra income. Many aim to achieve specific goals, such as retirement savings, buying a home, or funding education. They do this by diversifying their portfolios.
Some people now trade or invest full-time, regardless of their location or travel plans. They rely on strategies and portfolios for income, thanks to modern tools and technology. The technological revolution has also attracted younger investors to the market.
Fresh Approaches To The Stock Market
Technological advances have broadened investment opportunities. They offer people new options. Traditional investments, like post office savings and term deposits, remain. However, many are drawn to stock market trading. They seek higher returns and aspire for more.
Investing is not without its hurdles, but with each obstacle comes a fresh chance. Innovative stock market investment choices frequently serve as a counterbalance to the challenges experienced by investors. For instance, the introduction of mutual funds, whose funds are actively managed by knowledgeable teams at asset management companies (AMCs), has reduced the danger of stock market losses.
Ten years ago, mutual funds grew rapidly. They made money for investors but also took a cut as an expense ratio. Over time, investors noticed this cut added up.
Then, exchange-traded funds (ETFs) became popular because of their low management needs. Now called Nifty BeEs or Gold BeES, they match their benchmarks’ returns. Following this trend, Asset Management Companies (AMCs) also launched passive funds. These funds turned out to be cheaper than active mutual funds.
Mutual funds had problems. Investors lacked control over their stocks. They did not truly own them either. The net asset value (NAV) determined buying or selling. It updated daily, not in real time. This led to Professional Management Services (PMS). Expert teams manage portfolios with specialised tools. However, these services are costly. They require a minimum investment of Rs 50 lakhs.
However, as a result of technological advancements, ordinary investors now have low-cost access to these services, as SEBI-registered research analysts and investment advisors (RIAs) build superior stock portfolios that are regularly monitored and rebalanced. In other words, it functions similarly to a mini PMS in that you receive complete control over the shares in your demat account, the dividend is paid or reinvested as you choose, and you receive the delivery of shares for your portfolio.
In summary, technology is changing the investing scene with every new chapter, giving people more options, ease, and opportunities than in the past.
