What's In This Article?
The world of investing is always changing – and whether you’re investing to actively generate a profit or to save up for retirement, you can’t afford to be left behind.
In this article, we’ll explore four ways investing will change over the two decades and we will share a few pointers on how you can benefit from these changes, assuming you’re willing to adapt.
Continued Growth For Robo-Advisors & Online Investing
We’ve already seen a sharp rise in online investing platforms and robo-advisors over the last decade or so, and this trend will almost certainly continue over the coming years.
The great appeal of online investment platforms and robo-advisors is the fact they make investing much more accessible by reducing fees and easily providing investment ideas. Whether you’re a complete novice or a relatively experienced retail trader, these services can make investing much easier and more profitable for you.
Following the GameStop controversy, retail traders value transparency from their brokers more than ever. We’ve been moving towards higher levels of transparency for a while now, and there’s no reason not to expect more transparency over the coming decades, especially with higher than ever levels of competition among online brokerages and trade platforms.
This is good news for investors and amateur traders, but it will remain important to conduct your due diligence and be smart about which platform you decide to invest through.
With it becoming easier than ever for inexperienced people to start trading, the need for increased regulation to protect these vulnerable novice traders also increases.
On the whole, it’s likely that we will see more regulation over the next two decades, though in certain areas we may see looser regulation. Margin and disclosure requirements are two areas in particular where strict regulation is important to protect consumers.
Changing Role of Brokers
Data and machine-learning now play a much bigger role in the world of investing than they did a few decades ago. This, in tandem with the rise of low-cost online trading platforms, is disrupting the traditional broker-advisor model, and experts believe we will see the role of brokers continue to change.
Specifically, it’s believed their influence in the market will continue to decline, with other more cost-effective and transparent alternatives gaining market share.
In line with greater competition amongst traditional brokers and new digital platforms, it’s safe to assume that commissions will continue to fall steadily. This is likely to be the case across all asset classes, including Forex, equities, bonds and futures.
This will make it cheaper than ever to start investing, so this is yet another positive development for people looking to get into trading.
Most of the predicted changes in the world of investing will ultimately spell good news for amateur traders, as they should lead to more transparency, lower trading fees, and better, more effective regulation.
However, it will always be important to shop around and carefully decide which broker – traditional or online – is best for you and your specific financial goals.
A Quick Summary
- The world of investing is constantly changing, and industry experts believe the next two decades will have plenty more change in store for us.
- For instance, trading fees are likely to continue to fall due to greater competition among traditional and online brokerages and trading platforms.
- Furthermore, we can expect more transparency and more regulation.
- Many of these forecast changes should benefit traders, but it will still be important for every baby boomer to conduct due diligence and carefully think about which broker or trading platform is best suited to you.