Future of Stock Market for The Next Five Years and Beyond
In these uncertain times, everyone wants to know what the future holds for the stock market. Even a layman, who has little or no stake in the share market, is also anxious about the future of stock market. Besides the investors, common people also seek answers to questions like, what’s the future of stock market? What are stock market trends? What’s the future stock market predictions?
In short, future of stock market is really bright. I’ll share some research in this post on why I’m so positive on the future of stock market. Without wasting time, let’s dive into the gold mine.
Robo-advisors - Find another job human advisor
For those who are like me and just recently heard the word robo-advisors, stay put, this post will clear out most of your questions. Let’s start with the most basic one.
What is a Robo-advisor?
Simple, Robo-Advisor is an intelligent software that allocates specific funds for specific high-yield shares that are listed in the stock market for the best possible returns against available funds in investor's portfolios with little to no human inference. Let’s move to the immediate question that comes to mind after the above.
Which is the best Robo-advisor available in the market?
Well, as of now there are almost 200 robo-advisors available in the market and each one differs only slightly, so it’s a bit difficult to select the best amongst the ever-increasing list of robo advisors each year. Here’s a list of few robo-advisors that stand apart among others.
1. Betterment robo advisor - is the best when it comes to the quality of services
2. Wealthfront robo advisor - is the best for its low fee structure.
3. Charles Schwab robo advisor - for its best usability.
4. Vanguard robo advisor - is best for its flat-fee structure and lower minimum investment
Now coming back to our main question.
What’s the future of stock market from robo-advisor's perspective?
Well, the future of stock market really looks promising given the advent of robo-advisors. These are artificially intelligent algorithms that have been developed to analyze the stock markets in the most accurate manner. With their creation, stock investors don’t need to bother about the cost of hiring conventional/traditional human financial advisors.
Based on the market algorithms, they render advice that can help investors make the most returns from their investments. In a nutshell, robo-advisors have been created to automate the process of stock-trading easy and cost-effective.
ETF is an acronym for Exchange-traded funds. Ever since it came into practice during the 1990s, there is no doubt that it has grown in popularity. This is especially for investors who would like to diversify their securities at affordable costs. Through its adoption, investors can be more specific about their decisions to invest in the stock market based on asset classes, industries, and countries. It is fair to conclude that investors have become smarter through the advent of ETFs.
Where ETFs Are Headed
According to industry experts, one of the top ETF trends investors are likely to see over the next five to ten years is its continued growth. One financial analyst said, “I think the core ETF value proposition, which is extremely low-cost beta that’s transparent, tax efficient and easy to trade, isn’t going to go away.” In fact, he believes that within the next five to ten years, ETFs are likely to overtake mutual fund market share in the US.
Online trading has been part of the development of stock market over the years. It has grown from strength to strength after coming into existence in 1985 through the application provided by Trade Plus. The best part is that it is safe and more effective than the traditional form of stock trading. Today, companies are taking their trading activities online to ensure more people are given the chance to invest in stocks of their choice. These companies have systems which are highly encrypted. Experts have even predicted that the online trading future is promising given the advancements in IoT.
Commission-free Trading Apps
The advent of commission-free trading apps is a typical example of how far online stock trading has advanced over the years. With these apps, traders can take part in stock markets using their mobile devices. They only need to be downloaded and installed. These apps can be used without investors bothering about any charges or fees. A typical example is TD Ameritrade, which is known to offer free trading both for stocks as well as ETFs.
The Rise of Artificial Intelligence
The stock market has benefited immensely from the rise of artificial intelligence. Gone are those days when people used manual ways to get ideas for investment. Instead, they are embracing what AI intelligence is offering the stock market. For the first time, it has become very easy to build a stock portfolio from scratch. Artificial intelligence is responsible for scanning the markets with the aim of searching for viable opportunities investors can take advantage of within seconds. They are much smarter and more accurate than humans. These trading bots handle the process of stock market analysis in a fast seamless way. The future of stock market looks very encouraging given development in AI.
Increase in Trading due to Disasters/Pandemic
The stock market is highly volatile just like forex and cryptocurrency markets. However, the pandemic hasn’t affected it as most experts have earlier predicted. For instance, as of May 2020, it is estimated that over 20 million jobs would be lost due to the coronavirus outbreak. This hasn’t reflected in the stock market as equity performances seem encouraging to investors.
Sections in the stock market like consumer staples, healthcare, and technology seem are doing very well. This is an encouraging sign that economies will bounce back faster than most world experts have predicted earlier on.
Based on the above analysis, it is obvious that the stock market has a very bright future. This is because it keeps on waxing stronger than expected. Most experts believe that more people are expected to invest in it due to these positive developments. All the above will definitely boost the stock market for the next five to ten years and beyond.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Bilal Fazal