In order to turn investing accounts into sizable fortunes, investors need three things: compounding interest, good returns, and dependable returns. For the non-accredited investor, those three ingredients in the wealth-building recipe have remained unrealizable. Until recently.
Wealthy investors turn to financial managers and form entities, such as hedge funds or private equity groups, to max out returns and increase compounding. These financial managers are tasked with growing the investors’ pool of money and, until recently, they were very successful.
The hedge fund concept is not applicable to the majority of investors who don’t meet the Security and Exchange Commission’s (S.E.C.) rules on an “accredited investor.”
According to Wikipedia, the rules on accredited investors states:
In the United States, for an individual to be considered an accredited investor, they must have a net worth of at least one million US dollars or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year.” This rule came into effect in 1933 by way of the Securities Act of 1933.
The little guy and gal are supposedly protected by the designation, but in the regulatory world of unintended consequences, the wealthy have more opportunity to increase their wealth through better returns that can compound at an enormous rate.
What do the little people get? Mutual funds.
The performance of mutual funds are limited. First they are large funds that have limited investment opportunities, so their returns have been diminishing. To make up for low returns, mutual fund companies generally charge higher maintenance fees. (Sarcasm only slightly intended.)
Retirement accounts aim to protect investors from the biggest threat to compounding their investments: taxes. These accounts–401Ks, IRAs, and the like–have been very successful for businesses who are ensured a ready supply of labor because so few people ever retire early on the meek gains in their accounts, which are usually held in mutual funds and index funds. (Sarcasm totally intended.)
Automated Trading may be one solution for non-accredited investors who want to turn their investment accounts into wealth-building accounts.
Automated Trading systems trade numerous asset classes: currencies, stocks, options, and commodities, just to name a few. They are much more nimbler than mutual funds. And because the moves are usually originated by knowledgeable traders or trading systems, they are primed for high returns.
The major setback with human trading is that, since most are based on faulty human emotions. Automated Trading systems, also, may be based on simple, imperfect trading systems, the accounts are risky. It’s a legitimate criticism and one that can be addressed through education and improved technology.
At Online Investing AI, we want to address that shortcoming. We are introducing advanced technology that won’t rely on human traders to misread market signals or follow faulty mechanical trading methods that only work for short time periods.
By adding advanced technology, Automated Trading systems can be improved to become a better choice for working men and women who want to build wealth and gain financial freedom.
Accelerating Technology, Automated Trading, Money, Online Investing AI, US Economy
accredited investor, AI, Automated Trading, automated trading systems, hedge fund, hedge funds, private equity, stock market, stocks
Recently I read a really wonderful investment book that I want to share with you: The Dhandho Investor by Mohnish Pabrai
by Michael Lewis. It is the story of Mike Burry, a one-eyed medical student, and his ability to pick value stocks. His hedge fund was a runaway success, and his investment career is really amazing.
True story.
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
