Growth & Jobs | Improvement in technology encourages investors to be more hands-on

THE ADVANCEMENT in technology has helped to improve access to financial markets and is encouraging more investors to be more hands-on.

One such investor is Warren Robinson, a design technologist. Robinson, who has been an investor for the last decade, likes the convenience of using the platforms to do his own trading.

“I no longer have to go to a branch to conduct business with my investment house,” he said, noting that once there is access to the Internet and a computer, the average investor can be more involved.

“I can do my own trading, monitor my portfolio, and even cash out,” he said.

Robinson was referring to online trading platforms such as the Jamaica Stock Exchange’s (JSE) JTraderPro. The JSE platform can be to buy, sell, and trade stocks.

In recent times, companies have been leveraging technology to allow investors to easily participate in initial public offerings (IPOs) and additional public offerings (APOs). JN Fund Managers Limited has become one of the latest JSE brokers to launch their own electronic subscription platform as demand grows for digital solutions to participate in investment in the market.

Bloom by JN Fund Managers, JN Fund Managers’ investment platform, allows clients to sign up and apply for and purchase shares floated as IPOs, APOs, or rights issues, at their own convenience. Investors may use a Jamaica Central Securities Depository account number from any broker and complete the entire application process online.

Tools like these have enabled investors to take control of their investments and build portfolios tailored to their individual needs.

“It shows how rapidly the technology has grown. Five years ago, I would not have been able to do what I’m doing now. You can do almost everything online now and that is what I like, the ease and convenience,” said Robinson.

Dania Palmer, research manager at JN Fund Managers, said that this technological transformation has created an entirely new era of investing, one that is more efficient, accessible, and transparent than ever before.

“It also makes getting information about an investing opportunity easier with the use of technology. This is also a double-edged sword, however, as sometimes having too much information leads some investors to procrastinate, be overcome by other behavioural biases,” he said, noting that the accessibility may lead investors to be too emotionally attached to their portfolios and to overreacting, which may lead to excessive trading, which often leads to poor investment results due to the costs involved.

He informed that the technology also facilitated greater transparency, as it has increased the availability of market data and financial information. Investors can now access real-time market quotes, company financial reports, analyst research, and news updates, allowing them to make informed investment decisions.

Palmer also noted that several companies in Jamaica are providing access to annual general meetings and investor briefings live online.

“It (technology) also provides greater efficiency. Technology has streamlined the trading process, reduced transaction costs and improved speed. Electronic trading systems have replaced manual processes, enabling quick order placement and execution, as well as real-time trade notification, which benefits all investors,” he stated, adding that real- time trade notification can help investors to track the validity of trades executed through their accounts.

The JN Fund Managers research manager said the technology also facilitates greater diversification.

“Technology has expanded the range of investment options available to individuals. Investors can now easily access global markets and alternative assets, enabling them to diversify their portfolios and manage risk effectively,” he noted.

He cautioned investors to be careful, as he noted that while there has been some overwhelming good, there are disadvantages to the access created by technology.

“In terms of financial education, the plethora of online resources, educational platforms, and social media communities have made financial education more accessible. Unfortunately, however, investors must be very careful as many people are now purporting that they are ‘experts’,” he said.

For that reason, he said investors must ensure they only trade on information from their licensed financial advisers.