When dealing with investment portfolios, the landscape has changed significantly in recent decades. The influence of technology and specific legislation as well as individual and collective morality have altered the practice and motivations behind investing.
Unsurprisingly, advancements in technology have drastically altered the way that investments are established, traded, and organized. The integration of computerized trading terminals as well as electronic stock exchanges are considered influential in the investing world for their effect on the ease and expediency of trading, however these advances first occurred anywhere from thirty to sixty years ago. More recent developments include smartphone apps that permit instantaneous online trading as well as easy portfolio management. Big data and data analytics resulting from massive amounts of information being made accessible allow organizations like the SEC to monitor and evaluate stock exchanges and other financial markets. In many ways, technology has enhanced the investment landscape by allowing for faster, more accurate, and more widespread investment options to a larger global audience.
Emerging Growth Companies
The JOBS Act of 2012 changed the way that small companies could engage with private investors. This act created a new class of business known as emerging growth companies (EGC) and allowed such companies to bypass certain restrictions that previously limited the number of investment opportunities growing companies could access. In creating the EGC class, the JOBS Act focused on online investments, namely crowdsourcing, and established maximum contributions for individuals, maximum fundraising goals for businesses, and additional protections for online investors.
With a rising drive to change the world, many investors have turned to a specific kind of investing that is geared toward enacting positive change. Impact investing combines the typical goals of investing (which relate to generating financial returns) with a moral twist that also prioritizes environmental and/or societal change. Rather than simply targeting investors who want to make a profit, many emerging businesses have also found success in tailoring their goals to an audience that wants to make a difference. The concept of impact investing (that is, investing not for personal financial gain but rather the common good) dates back several millennia, but the modern term and practice stems from the 21st century. Appealing not only to capital prospects but to a desire to improve the world has proven to be fruitful for many businesses.