The technology revolution has had both positive and negative effects on investing and financial management. Investment technology is primarily a tool that investors and wealth advisors can use to improve their investment decisions. As with all tools, technology is most effective when it is used properly and for its intended purpose.

The financial consultants on the 6th Avenue Team at Ingalls & Snyder, LLC combine the intelligent use of investment technology with their aggregated years of investment experience on Wall Street.  We believe that investment technology changes investing in a positive way when that technology is used as a means to an end and not just an end in and of itself. 


The Big Picture: How Technology Has Changed Our Lives

Technology has changed virtually every aspect of our lives. Understanding those broader changes can provide insights into how technology has changed investing.

·   Technology provides access to significantly greater amounts of information. Anyone with an internet connection has access to a volume of information that is orders of magnitude greater than what might have been available only ten or twenty years ago. The availability of all of that information can have a significant impact on how decisions are made.

·    Technology increases the speed of information transfer. News about events in all corners of the world is now almost instantly available. The speed of information flow can remove much of the speculation from decision-making processes.

·  Mobile hardware technology removes the physical limitations on information availability. Individuals are no longer constrained to specific physical locations in order to access the information they need to make decisions. 


How Has Technology Changed the Stock Market

These broader changes are reflected in the significant effects they have had on the stock market and investment markets in general, including:

·    Lower entry barriers for small investors, which has increased the number of investors in the market and the overall volume of trading;

·   Reduced trading transaction costs, which has further inflated trading volume and, to some extent, price volatility;

·   Greater availability of different investment products, including different types of investment funds, derivative products, and cryptocurrencies that give investors an opportunity to invest in a broad variety of assets;

·   Open cry trading pits are being supplanted by electronic trading platforms that have increased order execution and transaction speed;

·   Artificial intelligence-based program trading offers an alternative to human analysis of investment decisions.


Investors who rush to embrace new technology apart from the discipline of a strategic wealth management plan may be taking risks that can have adverse effects on their generational wealth and the steady growth of their assets. The speed of availability of an immense amount of information, for example, can foster emotional responses that might undermine an investor’s long-term goals. Rather than fall prey to emotion, savvy investors use technology as a tool that serves the goals and needs of their individual wealth management plans.

Technology can be used effectively both in the development and in the administration of an individual plan. In plan development, investors and their financial advisors can use technology to:

·       Predict an investor’s needs for future cash flow and asset growth, based on the investor’s current circumstances and a set of objective assumptions about prospective developments;

·       Identify investment assets that are consistent with the investor’s tolerance for risk;

·       Analyze the growth and performance of an investor’s current portfolio; and

·       Create a permanent record of data inputs that are used in the formation of a wealth management plan for comparison with the investor’s evolving needs throughout the administration of a plan.


After a plan has been developed and an investor’s assets are under management, technology can improve that management by:

·     Sending automatic alerts when asset market prices exceed certain limits;

·       Connecting a portfolio’s value and performance with other software that an investor uses to manage finances;

·       Identifying investment outliers that give an investor an opportunity to add value as a function of unique or one-time events;

·       Monitoring micro and macroeconomic conditions and their effect on an investor’s portfolio to facilitate revisions that can keep a portfolio on track; and

·       Reducing trading and transaction costs to enable a more actively managed portfolio.


The advent of artificial intelligence, robo-trading, and algorithm-driven investment strategies have not eliminated the need for a strong human element in wealth management. Technology remains unable to assess the subtle nuances that distinguish the unique and individual circumstances of each individual investor, and all too often when technology is allowed to drive an investment plan, those nuances are ignored and an investor can be pigeonholed into one of a small handful of automated strategies.

The financial advisors on the 6th Avenue Team at Ingalls & Snyder, LLC use technology to serve our clients’ individual needs. Our clients will always interact with one of our experienced advisor representatives, who will monitor the client’s portfolio and verify that investment decisions are consistent with the personal wealth management plan that we develop together.

For more information about our services and our philosophy on the effective use of technology in investing, please call our New York offices to schedule an in-person appointment with one of our investment advisors.


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