Why modern investors face greater challenges than ever before

The world keeps changing, and it sometimes seems as though the pace of change is increasing all the time. There are many problems and challenges facing modern investors that just weren’t an issue 50, 20 or even ten years ago

One of these is the sheer quantity and speed of information out there. Investors now have to keep up with a constant stream of updates and be able to make on-the-spot decisions based on sudden turnarounds, with the full knowledge that every other investor out there is doing the same thing.

To put it mildly, this makes investing a far more pressurised experience than it once was. Keeping on top of news feeds from every investment source and marketplace, while being able to detect and filter out false information, rumours and even attempts at fraud from the verifiable facts, is very different from when you just had the financial pages in the daily newspaper and quarterly company results to think about.

Uncertain climate

Today’s investor needs to know about changes in value minute by minute, as well as keeping up with relevant economic and political news. This in itself is a challenge simply because there is so much going on. The world today seems more uncertain than ever before – or maybe we’re just more aware of it.

Either way, the economies of major nations seem a lot more precarious than they used to, and a multitude of issues, from Brexit to climate change, can have a significant impact on investments. Anyone trading on the financial markets has to stay informed about world news and factor this into their buying and selling decisions.

Technological progress

Developments in technology are also providing new investment opportunities all the time. Back in the day, there were a handful of traditional commodities that you could sensibly put your money into and expect a decent return. Now, we have a whole range of disruptive tech coming through from one day to the next, from virtual reality to the Internet of Things, alternative energy sources to medical breakthroughs and so on.

Not all of these will be successful, but some will undoubtedly be world-changing innovations. They will also inevitably impact on traditional investment commodities such as fossil fuels or metals. Investors wanting to get in on the ground floor have to be able to pick the right horses, as well as being able to endure teething difficulties and hold their nerve for long-term results.

More choice

This kind of investing is no place for the risk-averse, but there is also now a wider range of areas to invest in than ever before. Choosing where to put your money and finding reliable information to guide you is another very modern challenge. Besides stocks, bonds and commodities, today’s investor also has a wide choice of alternative markets, including cryptocurrencies, hedge funds and ever more niche forms of investing.

Even the forex market as we know it is a relatively new phenomenon. Those wanting to buy and sell currency need to choose a reliable broker who gives excellent value. As this list of forex brokers shows, there is a wide range of options available, and some are definitely better than others.

Rise in scams

Unfortunately, investment scams and fraud are also more common now than ever. In the modern age, they are also becoming increasingly sophisticated and harder to detect. This is largely an unfortunate side effect of improving technology.

In 2017, roughly two million incidents of online fraud were reported in the UK alone, and authorities claim that this probably represents around 20% of the total. The use of malware, ransomware and the like is joined by the more subtle use of fake news and social media bots to affect trends that can, in turn, persuade even the smartest of us to make unwise investment decisions. Email hacking is also on the rise, while the rise in new investment forms such as CFDs and Bitcoin opens up new possibilities for scammers to defraud the unwary.

None of this should put off anyone trading on the investment markets, however. It merely serves to illustrate the increased need to stay vigilant, and the way that modern investment trading requires knowledge, skill and commitment, or at least a dedicated broker or portfolio manager who can take care of these matters for you. Today’s technology means greater opportunity, but also greater risk. However, these two qualities have always gone hand in hand in the investment world. Now, the stakes are higher, but so, potentially, are the rewards.