The growing trend of active traders

David Jones
THE last 15 years or so have seen a sea change in how people manage their investments and approach financial markets.

For anyone much under the tender age of 40 it’s probably taken for granted that real time prices, charts and news are all part and parcel of a trading or investing account. Of course, this wasn’t always the case and it has been the development of high-speed internet connections and browser based trading platforms that have given us all of this information at our fingertips.

The rolling twenty-four hour news services have also played their part – we are much more aware these days of what drives financial markets. And news in recent years hasn’t been positive: the banking crisis and the slide in stock markets, culminating in the European debt worries of the past two years. All of this has led to increased market volatility – and an awareness of the sort of moves that can happen across all sorts of asset classes – be they in individual shares, foreign exchange or commodities.

As such, it’s not too surprising to see the growth in the number of people wanting to take a more active role in managing their own money. While some may yearn for the days when we didn’t have flashing prices at the click of a mouse – ignorance may have been bliss – the truth is the volatility was always there. Whether it was the precious metals bubble in the 1970s, the stock market crash of the late 1980s, or sterling’s ejection from the European Exchange Rate Mechanism in the early 1990s.

These days we have all the information. Some may say there is an overload of it, but at least we now have the luxury of being able to pick and choose whether or not we act in a choice of more markets than ever before.

David Jones is the chief market strategist of IG Index. He will be speaking at Active Trader, on 24 May 2012