Investments: How data analytics can help investors
Over the years, we’ve witnessed investment firms lose money from good ideas gone bad investments in startups. You might recall Softbank’s wework saga, Theranos, and recently, FTX, amongst others.
On the other hand, investment firms like Renaissance Technologies had earned billions using data analytics even before mainstream media could catch up. It’s worth noting that Wall Street praised them for having the best track record on the block, one from which other investors can learn.
Making sense of the wide sources of market data is difficult, and there’s room to believe that the many failed investments had some data-driven support. A thoughtful problem with these investments could have been sentimental investing, due to known derivatives from brand awareness, ”hype” and interest. While these have their place for determining what’s considered for a good investment opportunity, they are not enough . Even so, not every piece of data is as important, but if carefully categorized, they can reveal insights for better business intelligence. Proper analysis can inform investors whether jumping on in a band wagon is worth it or not. Investment firms like Renaissance Technologies have proven that data analytics coupled with other elements can promise a continuous year-long winning streak.
Making investments of any nature requires some sort of evidence about the expected ROIs- influenced by patterns, market information, fundamentals, market access consumer behaviour, regulations, to name a few. Typically, data analysts may merge data from these to provide insights for better business intelligence.
A typical graphical chart from an analytics platform provides decent and valuable insights that investors can use. However, the data sources might be so many and complex that these charts may lack adequate high-confidence information, thus the need for concrete in-depth analytics to rescue investors from potential catastrophes.
The Idea is to transit from sentiments
To data-driven investments
Utilizing adequate data analytics could trigger:
• Plan for investment opportunities.
• Decision making concerning the exit or takeover of an entity.
• Ameliorations in the companies invested in.
The priority of data analytics here is to give investors the highest ROIs possible, seeing that investors typically want to minimize their risk exposure.
DiligentMinds Consulting is an analytics firm offering a wide range of data services from medium to large size enterprises, to help them drive their business and uncover real business insights. Contact us to get started.
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