It is easy for people to think that they are above average in intelligence. I asked a friend the just last week if he was good at trading stocks? He responded with “yes” and went on to say that he would trade via a free trading app. He proceeded with trying to give me advice on how to trade stocks successfully. I asked him what strategy he used and it became apparent he had no strategy when it came to trading stocks. In fact, I started to realize that he hadn’t made any money trading in the last 2 years. He was actually in the negative. Regardless of his own success he still thought he was a 7 out of 10 when it came to trading. Why is this? According to social scientists, this is known as ‘illusory superiority’. It’s a feeling of being better than others, even when there is no actual evidence backing this. However, even the so-called above-average people admit to their shortcomings and often wave the white flag when it comes to managing money and investments.
Surveys and research work indicates a low level of financial literacy among regular investors and even stock market traders. Why are we not surprised?! Having been in the trading and investment business for some time, people have started to realize that it is easy for investors and stock market traders to get sucked into a vessel of guilt, frustration, embarrassment, and negative emotions. This often leads to investment or trading paralysis. All this stems from ‘Illusory superiority’ and a low level of financial literacy.
According to the Financial Industry Regulatory Authority (FINRA), nearly two-thirds of Americans can’t pass a basic test of financial literacy. FINRA is the governing body that sets regulations for stockbrokers. A major reason for the low level of financial literacy among Americans is the boring nature and complexity of finance fundamentals.
For many investors and stock market traders, it can be extremely difficult to grasp the fundamentals of finance and the relationship between money and time. Since they are both abstractions, determining the relationship between money and time can be a real challenge, one that most humans are unlikely to overcome by themselves.
Why People Fail
A person investing money and trading the stock markets can be categorized into two types. The first type comprises of people who have little confidence in their abilities and thus delegate the responsibility of making shrewd investments to a ‘professional’. This is an industry ‘expert’ who apparently knows how to invest the money of people into stocks or other assets. Thus, the first types of people give their money to the professional and forget about it for years.
The other type of person investing money and trading the stock markets is one who relies on ‘street education’ to make money and stock market investments. The typical approach for these people is opening an account, allocating some money for trading, and then looking for stock trading tips in online forums or from people who have traded successfully in the past.
Both approaches are counter-productive and can run you dry. The approach used by the first group of people mentioned above is not advised because you need to pay a commission for the services provided by the ‘expert’ or middlemen. On the other hand, relying on ‘street education’ or ‘news’ to make investments and trades can quickly run you dry as you’re mostly relying on intuition or gut feeling rather than fact-based evidence to make the investment or trade.
The good news is that you can overcome all the problems associated with the above approaches by transitioning to something more subjective and numbers based, which is AI investing or also known as automated intelligent technology.
By enabling AI investing, the Algorithmic Trading Software from iFlip takes the human element out of the investment equation. The AI investing or Algorithmic Trading software uses proven proprietary algorithmic intelligence (AI) to buy, sell or hold stocks to grow wealth for investors.
This is a solution that takes out the middleman and replaces it with technology that has proven to successfully buy, hold and sell stocks when it is advantageous for its investors.
iFlip’s AI investing software automates everything from technical analysis to on-demand trading execution to ensure that your money is invested in a way that allows you to trade profitably! No experience with stocks or tech savviness needed.
In the next decade people will see a switch from traditional
401K and retirement investment accounts to AI softwares because their performance has
shown superior results.