Eager to get started on investing but unsure how the experts do it? It’s not just luck, it’s strategy. There are ways to predict the success of an investment before you make that leap, cross your fingers and hope for the best. It involves research, but don’t worry, some types of software can do that for you.
Here’s some of the secrets that professional investors use…
Using Data and Technology
In order to make sensible decisions, investors use data to help decide what to put their money into. This data can be collected by specialist software. Data can tell us a lot, it can be used to make practical and financial decisions, it backs up any logical theory with facts and numbers.
What Data Tells Us
Collected data can tell us how people use things, it can also tell us the history of a business so we can get an idea if it’s worth investing in. Combining the history of a business with current rising trends and predictions can lead to an investment that pays off.
Getting Help With Software
There’s an app for everything these days, and that includes for doing things such as investing and trading crypto currency. This software will present the aforementioned data in graphs and charts so you can see how well (or badly) a certain company is doing. The Apple Stocks app on iPhone does this as well.
Best Investment Apps for Beginners
To get you started here’s a list of some of the most popular investment apps.
- SoFi Invest
- Ally Invest
- Acorns Invest
- TD Ameritrade investment account
Some of the investment apps above like Robinhood also allow you to trade cryptocurrency, but if it’s something you are looking to get into here is a list of some of the best crypto apps:
- Crypto Pro
- Cash App
Experts that are fully immersed in the trading world use certain strategies to decide whether they can gain success from their investments. An estimated 90% of trading on U.S public markets are already using algorithmic quantitative trading strategies. As investors continue to use technology, this percentage will likely grow even higher.
What Is a Quantitative Strategy?
A quantitative investment strategy, sometimes shortened to quant strategies, and also known as systematic investing strategies refers to using an investment strategy that analyses historical quantitative data.
This quantitative research can be applied to pretty much any industry, not just investing. You can also use it for industries such as insurance and sports.
Quantitative investing uses data to calculate the fair (or just below average) value of stocks. It can also be used for earnings forecasts and other things that help investors make decisions into where they allocate their money.
Quantitative analysis uses the historical data to find and calculate the main factors in both risk and returns. This will help to identify buying opportunities, basing the decisions on trading prices, and can be used in a number of ways.
On the other side of things, you have qualitative analysis which uses subjective judgement to analyse the value of a company. Traders will use their own tastes, opinions and feelings about aspects such as the company’s management, level of expertise and so on.
The lifecycles of the industry will also be taken into account. There are usually 4 and sometimes 5 stages of an industry’s lifecycle. These are:
The Introduction or Startup Phase
This is when a new product or service is developed and the early marketing of it begins. Information about the product will be limited, so it’s the stage where consumers need to learn more. It will not be certain how big demand is, and profits will be low or non-existent.
Now that consumers understand this new product or service, demand grows rapidly.
Maturity Phase (and Shakeout)
Shakeout is sometimes included as a separate phase making 5 in total, during shakeout the growth slows and the focus will be on streamlining and reducing costs.
Growth stops, weaker competitors leave and others will have to renew with changes and expenditure.
Research Your Investments
These are a handful of things that professional investors consider. Learn more about both these, and the businesses you want to invest in, and it’ll be the key to your success.