Did you know that around 56% of Americans own stock? Thanks to technology and accessibility to digital currencies and digital investing, it seems to be taking over the investing world. If you are wondering “what will the investment firm of the future look like?” you are in the right place.
We have put together this guide to share more about the future of investing. Read on to learn more.
Future of Investing Is 24/7
Long gone are the days when investing had to happen between business hours. Remember the famous stock market opening bell that plenty of people would await in the morning? Thanks to computers and technology now investing is being revolutionized right before our eyes to allow investing any time of day.
Websites like Robinhood are a perfect example of a company that is working towards offering 24/7 investing in the near future. This will allow retail investors and regular people to invest on their own terms and within their own timelines, no matter what day of the week it is or what time of day it is.
Companies like Robinhood have been working for years on their mission to democratize finance for everyone.
Cryptocurrency
What once was looked at by a certain community is quickly becoming a household name, and it’s turning skeptics into believers. In fact, analysts are predicting that the cryptocurrency global market will more than triple by 2030.
Instead of being more of a niche hobby among cryptocurrency or Bitcoin enthusiasts, everyday consumers now see this new asset class as a way to diversify their portfolios even more. In even more recent times, cryptocurrency started to also attract traditional finance and institutions.
Although attracting these institutions means there is a higher potential for everyday investors, having banks involved, in a sense threatens the original goal of operating outside of traditional finance.
Bitcoin ATMs are also growing in popularity and more ATMs are popping up in cities. This makes it convenient for anyone that has a smartphone to buy cryptocurrency without the need of having a bank account. In fact, the average consumer in the United States uses ATMs around 3.8 times per month to take out cash.
Another added convenience of buying cryptocurrency at an ATM is that you do not have to go through a KYC verification, which delays the process of buying crypto. Exchanges are now required to go through this verification before people can deposit and withdraw any crypto but this is not necessary at a bitcoin ATM.
Exchanges also require customers to link their bank account information, which means that if there is a data breach, personal information for a customer can be put at risk. You can learn more here about buying crypto at an ATM near you.
Guideline
This company is headquartered in Austin, Texas, and its latest valuation was around $1.15 billion. Guideline administers 401(k) plans for small businesses and they only charge a base fee of $49 per month.
Guideline partners with payroll providers like ADP, Square, Intuit, etc. For businesses that are affected by laws such as requiring those with 5 or more employees to offer a retirement savings plan are finding Guideline to be helpful.
Public.com
Public.com is a brokerage app that allows people to invest in ETFs, cryptocurrency, stocks, fractional trading of NFTs, etc. without charging a commission.
Instead, Public.com introduced “Pulse” as a new revenue source. Pulse allows companies that want to promote their stocks to hold town halls and pay for data about retail investors.
The company’s headquarters is in New York City and they are valued at around $1.2 billion. There are currently millions of users taking advantage of Public.com’s services.
Metaverse
Although the metaverse is relatively new and sounds like something out of the Jetsons, there are investment opportunities popping up. This immersive virtual world is built on virtual reality, augmented reality, and gaming elements.
Right now it can be compared to the internet of the early 90s or the early smartphones in the beginning of the 2000s. The metaverse is expected to become much bigger in the future, where people’s every day lives will be changed and affected by it.
Some of the changes coming are how people work and play. For example, users will be able to transport to their favorite golf course, even if it is across the globe. Those taking virtual meetings for work will experience it in a whole new manner and more realistic than ever before.
Although, the metaverse has at least a few years maybe even a decade before it is 100% mainstream, there are investing opportunities for those that see the potential. If you are looking for investing opportunities, look for those companies that can supply the big software, hardware and internet.
For example, making AR glasses that are fashionable, wearable, and functional in the metaverse are going to require new lenses, chips, and batteries. You want to look for investing opportunities with those companies that will be creating these new devices to work in the metaverse.
iCapital
With iCapital more than 10,000 financial advisors connect with their thousands of high-net-worth clients to offer venture capital, private equity, private debt, real estate, and hedge funds. The minimum investment per fund with iCapital is $25,000.
This investment is a lot less than traditional minimums for these types of funds, giving more people an opportunity to invest. Traditional minimums for these funds can run around $1 million to $10 million.
iCapital provides white label service to more than 140 firms including names like The Carlyle Group, Blackstone, Goldman Sachs, etc. Their latest valuation is around $6 billion, making them a trustworthy investment source for those with a higher net-worth.
Stash
This company offers fractional investing in IRAs, stocks, ETFs, and checking accounts. Stash also has a debit card that customers can use, which gives fractional shares rewards with every day purchases.
Its latest innovation was Smart Portfolio, where a customer can have a managed portfolio matched to their risk tolerance. The minimum investment is only $5 and there is an option to allocate around 4% to 6% in cryptocurrency.
Stash does not want to leave anyone behind in investing opportunities, so they acquired PayGrade recently and rebranded it to Stash101. This is a financial literacy platform that offers free educational content for parents, teachers, and students.
Long gone are the days when investing was lucrative and only certain people had access to investing their money. In today’s world and the future of investing, the average person can learn and make educated decisions on where and how much they want to invest.
Investors Will be More Self-Ruled
As we mentioned earlier, investors in the future will have a lot more control of their portfolios and investments. Investors will be able to make decisions without having to rely on hiring an advisor. Of course, this will mean that a lot of self research will be needed.
In the future, there will be more machine learning and artificial intelligence providing investors with access to data. This will also give investors the ability to analyze the data more accurately and faster.
An investor will be able to make better informed decisions about where to invest their money. Investors will also be able to take higher risks that will allow customers to make much higher returns.
Keep in mind that although investors will have the ability to be more self-ruled, this will also come with a downfall. An investor will have to be more vigilant about protecting their money from scams and fraud. This ability to be more self-ruled and will come with a lot more responsibility.
Self investors also have to be aware of market bubble potentials.
Education and Healthcare Investing
In the future, both education and healthcare will become more popular investment choices. The reason is that the aging population will rise along with the cost of both education and healthcare.
Education is one of those assets that is recession-resistant, making it more popular in a portfolio. Also, technology is advancing education and it is helping revolutionize how information is shared in all aspects of life including, education.
Premium Real Estate
Investing in premium real estate is going to be more desirable in the future. Investors will have the option to place their money into high-end real estate without having to go through traditional channels. Instead, investors can use NFT tokens collateralized to real estate or crowdfunding platforms.
The plus side of this is that more people will have access to investing in luxury properties like office building sor vacations homes. Plus, they can invest for a fraction of the cost.
Global Real Estate
Another hot investing option in the future will be global real estate. Even those living in the states can invest their money in real estate anywhere in the world. There are regions that the government has designated as having high economic growth potential, and those that invest in those areas will receive significant tax breaks.
Many of these global real estate options are in up-and-coming neighborhoods, which can equate to high returns. Please keep in mind that when investing in a high opportunity zone, there is a high amount of risk that the neighborhood does not grow.
This risk means that some investors can end up losing money so you never want to invest money in the global real estate market that you can’t afford to lose.
Crowdfunding Startups
In the past, startups were funded by high-net worth individuals or by venture capital funds. Thanks to evolving technology and increase in virtual communication, there are other options.
Many platforms allow startups to raise money via an equity crowdfunding option. This means that regular people now have the opportunity to invest their money with a potential company that they believe in before there is an initial public offering.
Alternative Investments Will Grow
Alternative investments such as cannabis and cryptocurrency will give investors more options to investing. Although this already began it will become even more popular in the future.
The great thing about alternative investments is that they are not correlated to the stock market and they offer high returns. It is predicated that Millennials and Gen Z are more likely to invest in alternative assets in the future.
Digital Data
Brokers and financial advisors will eventually be replaced by digital data in the future of investing. The reason for this is that people are becoming a lot more comfortable with making investment decisions on their own without guidance from anyone.
Mobile app inventions and access to online tools allow more people to access information about investments and investment opportunities. Younger generations are more comfortable with technology and are also more aware of how to buy and sell stocks in comparison to older generations that had to rely on financial advisors before investing their money.
Younger generations are also a lot more comfortable with taking risks because they are conducting a lot of research and studying data. Unfortunately, the future of finance professionals is a bit in limbo. In order for these professionals to stay in business they will need to stay relevant.
Adapting to the changing landscaping of investing is imperative for finance advisors and investment firms to survive in the future of investing.
Investment Firm of the Future
Now that you have learned more about the investment firm of the future, you can make informed decisions about where to put your hard-earned money. Make sure to consult a financial advisor if you have further questions or specific questions regarding your own finances.
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