5 trends in digital investing in 2020.


The digitization of investing is the future. About 30% to 35% searches with respect to investment products go through a digital channel today, rather than word-of-mouth, family, friends, and other offline sources. If you want to catch the shift to digital investing, investment firms should prioritize building up their digital marketing skills. This will help capture the attention and consideration of consumers to employ digital means right from the beginning of their investment journeys.

Why is digital investing turning out to be the future of investment?
The answer is quite straightforward: digital channels systematizing investment bring people closer to it, simplifying the process and making it more understandable to the average beginner. Ideally, a digital system of investing should come with transparency. Previously, offline or rather structured investment products of the past have been shrouded in opacity, especially their hidden costs. This was just what was standard, but now, transparency is the norm, and digitization has pushed that trend forward.
It’s crucial to make clear here that transparency is not the complete disclosure of every single legal or technical detail of a financial instrument. Rather, it is the investors fundamental right to stay informed in a clear and efficient way about the following:

Level of risk associated with the investment such as liquidity, potential loss, and diversification.
Cost of a financial solution including inducements.
The suitability of the fund for investors.
What digital investing trends are visible in 2020?
A slew of digital investment trends can be seen across 2020. Some of them are

1. Portfolio management digitalization
Traditional portfolio management has adapted to digital portfolio management. Advisory fees have astronomically lowered, and wealth management has been democratized for the masses. Robo-advising is the latest buzzword, with apps such as Wealthfront and Betterment pioneering it. Robo-advising — or online advisory services — work with the goal of giving everybody access to a digitized portfolio that is crafted to their needs. Diversification as a means to bring in steady returns is a no brainer for most investors today, and robo-advisory services may be the service to thank for that.

2. Theme-based portfolios
Earlier the only motivation behind an investment portfolio was to book profits, but now we see people choose more socially conscious companies to invest their money into. A third trend we can see is portfolio gamification. The investment decisions behind portfolios are now aligned to one’s personal beliefs and interests. These are referred to as theme-based portfolios. Socially conscious millennials seem to prefer what is known as ESG investing — environmental, social, and governance (ESG) investing.

3. Premium-free trading
Another digital investing trend is the lack of added cots for trading transactions when trading is done digitally. Apps like Robinhood removed any transaction and trading fees and increased the reach and accessibility of trading to more people. Trading as a beginner is now hassle-free. You also get the option to open up margin accounts, trade through crypto and other options, and get benefits that other brokerages charge for.

4. Social investing
One counterintuitive trend being observed is the sharing of one’s investments on one’s social media, so others can see one’s investment history and take lessons. There are swathes of investors who simply share their information with one another on community forums. Forums dominating this space include eToro, StockTwits, and Sum Zero. There are niche communities for a specific type or group of investors — such as Sum Zero being geared towards value investors who want to estimate and analyze the growth potential of a stock. On the other hand, an app like StockTwits is more like a twitter news feed for sharing updates about share prices. The world has never been more connected, and investors are a part of this web.

5. Unique Asset Classes
A final trend being observed is the appetite for and accessibility to alternative and unique asset classes. Technology is giving investors access to asset classes never seen before. These include digital products like cryptocurrencies, music royalties, and private placements. The birth of crowdfunding has also enabled people to asset unique companies with products or services that are fulfilling some niche yet necessary need. From the same platform, one can invest in real estate, cryptocurrency, tokenized assets, and startups.