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The digital investor: what are your options?

THE DIGITAL world has shaped all aspects of people’s lives. From the products you buy to the way you get to work in the morning, technology is exercising its influence everywhere, and the investment sphere is certainly not excluded from this.

Despite the perception many lay people have of small-time investors poring over printed share certificates, or bowler-hatted stockbrokers in London offices, there’s actually a distinctively technological side to this industry.

Investing in the digital age can mean many things, including everything from savings apps that round up your spending and invest the difference to the interesting and somewhat scary world of cryptocurrencies.

This article will explore three of the major options you have at your disposal if you’re looking to make the most of digital technology to grow and manage your personal wealth.


Perhaps the most obvious place to start if you’re thinking about digital investments and wealth management is cryptocurrencies, as they are the talk of the investment town at the moment.

Cryptocurrencies operate like normal currencies, and rise and fall in value just as the pound or the dollar might do. But the difference is that they exist entirely online in a decentralised ledger that doesn’t have the regulatory oversight that – say – a central bank might have.

Rewind three or four years, and crypto was the major name on the digital investment block. Bitcoin in particular was heralded as a token that would rise and rise in value, and others also received some hype. While there is potentially still some cash to be made from crypto, it’s worth sounding a note of caution.

Crypto is beginning to face more and more regulatory scrutiny: in the UK, for example, media reports late last year indicated that there may be a ban on crypto-referencing derivatives on the way.

And as any guide to cryptocurrency trading will tell you, price volatility has crept in. In November 2018, for example, the coin saw a loss that amounted to three-quarters of its overall value. As with any investment, then, buying crypto could go wrong – but the digital element makes it particularly vulnerable to overhyping.

Savings apps

There’s an app for everything these days – and saving is no exception. By giving a third-party app read-only access to your bank account, you can create a system whereby any spare money is seamlessly channelled into an investment portfolio with a risk level of your choice. Some such apps have nifty features such as a “round-up” function that allows you to save the difference between your most recent transaction and the nearest pound.

The rise in smartphone apps like Moneybox is aimed particularly at millennials on the assumption that the savings and investment mindset – and the associated wealth management products required – needs to meet them where they are rather than the other way round.

But while the funky graphics of a young person’s app might be disconcerting, there’s no reason why older investors can’t also make the most of mobile and other technologies to manage their wealth. Major investment providers such as Hargreaves Lansdown offer mobile apps for portfolio management, and they’re well worth exploring.

Contracts for difference

Finally, one of the most popular options when it comes to trading in the digital world are contracts for difference. These financial products essentially mimic an underlying asset, and rise and fall in proportion to its value, but without you actually having to purchase ownership of the asset.

If you want to trade scarce Facebook stock, for example, you might find that you have to wait until more is made available, but a contract for difference means that you’ll be able to benefit from the market changes in Facebook’s stock without having to go through the administrative hurdles of buying the real thing. They’re particularly popular online, as they offer a way to enter an investment sphere and start trading in it in just a few hours.

CFDs are leveraged products, though, which means that sometimes their value can drop (or, indeed, grow) exponentially – so it’s wise to be careful.

Digitalisation is changing our world at a fast pace, and the investment industry is not immune from the shifting sands. Cryptocurrencies continue to be highly popular despite a drop in their value over the last year or two, while savings apps and CFDs are also good choices.

By doing your research into these and the other digital investment options out there, and perhaps by consulting a good old-fashioned, real-world financial adviser, you’ll be able to find a product solution that works for you and your money.

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