If you’re like most people, comprehending stock exchanges and trading indices is as difficult as deciphering a foreign language. As for advice, experts assure you that the best default is to diversify your holdings. Why is that? Well, since reaching the status of an expert investor takes years of poring over endless charts and obscure analyses, and all investments come with some level of inherent risk, your best strategy is to limit your exposure by spreading your investments as thinly as possible – diversifying.
Or so the story goes.
In Southeast Asia, however, an increasing number of companies are offering investment education as a core component of their digital platforms. Let’s take a quick look at two companies that are lowering the barriers to investing in the region: iGrow in Indonesia and eToro in the Philippines.
This Indonesian startup focuses on connecting tech-savvy urban consumers with farmers in search of capital to grow and maintain their organic farms. Before iGrow launched, Indonesia’s 60 million middle-class urbanites lacked the land and farming knowledge to make informed investments in this industry, and farmers had no access to the technology or resources to connect with potential supporters.
So, how did iGrow manage to get Indonesians to invest in farms? They capitalised upon the country’s growing digital literacy rates and social media usage to create an app that felt familiar to amateur investors. Their app looks highly similar to an Instagram account, where you can track your investment success metrics, browse farmer profiles, and view the latest crop updates from your network.
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iGrow eliminates the hassle of researching and analysing crop patterns and practices and instead displays metrics such as real-time crop conditions and seed types available, along with the average time to harvest for each listed crop. By tracking these metrics on their main dashboard, Indonesians with disposable income can make informed investment decisions.
Currently, the company offers durian, peanut, and longan crop investments. Interested in signing up to support an organic farmer? It’s a simple three-step process: register on their platform, decide how much you would like to invest, and wait to receive potential returns.
This ‘social trading’ platform set out to prove that it’s not necessary to understand in-depth investment theories to achieve a level of success rivaling top traders. Here’s how it works. Amateur investors can view the risk level, track record, and portfolio composition of more experienced investors and mimic their decisions via eToro’s CopyPortfolios feature.
While some could argue that eToro bypasses investment education to provide its users with direct value, the company does allow amateurs and experts to exchange information and investment strategies. They’ve also broken down the barriers to entry for a staggering number of novices: according to their website, over 277 million total trades have been opened on eToro. It’s no wonder, then, that they claim “investing in the financial markets has never been easier.”
Not only is eToro making investors out of ordinary people, but they also aim to dissolve the barriers to investing in new technologies. If you’ve listened to any financial news lately, you most likely realise that cryptocurrencies and blockchain technology may soon redefine our financial institutions. This is where eToro’s Cryptocurrency Trading Platform offers a launching point for fledgling investors. In an easily understandable format, new investors can explore an ever-expanding offering of cryptocurrencies as well as buy and sell assets.
Why Southeast Asia is the top investment destination
The bottom line is that this company is giving new investors the information and tools to invest and grow their money, regardless of whether they decide to invest in traditional sectors or emerging ones such as financial tech.
Make investing mainstream
So, several Southeast Asian companies are lowering the barriers to making smart financial investments by simplifying the ‘endless charts and obscure analyses’ mentioned earlier. To return to the metaphor of investing as an indecipherable language, iGrow and eToro act as a ‘Google Translate’ in order to empower ordinary people to invest their savings.
These companies have capitalised on two developments: first, the majority of Southeast Asians now have access to mobile technology and the internet; and second, they possess increasing amounts of disposable income. This means that as they accumulate more savings, it will be crucial for them to invest their money to retain purchasing power amidst national inflation. After all, if individuals grow their wealth, they often contribute more to the national economy.
Consider the impact that Southeast Asia’s rapidly growing middle class will have on commerce and economic growth if they begin to invest their money back into farmers, companies, and communities. Can they create economic powerhouses out of developing countries? It remains to be seen. Yet if innovative companies continue to provide them with the information needed to smartly manage their money, the future of the region looks lucrative indeed.