Despite the convenience of commission free brokerages, retail investors are still hitting a roadblock when it comes to participating in the stock market. I conducted a survey of 100 active investors, and the result showed that a lack of time to research stocks, insufficient funds, and limited knowledge are the top reasons preventing them from investing more frequently. These challenges represent the last mile of retail investing, a critical hurdle that keeps many people from participating in the market.

The Evolution of Retail Investing

Commission Free Trading: Robinhood revolutionized investing for Millennials and Gen Z, offering a user-friendly platform for easy and affordable stock market participation. The app’s commission-free trades and user-friendly design have shattered traditional barriers such as high fees and minimum requirements. This allows even novice investors to participate in the market.

Diversification: ETFs, or exchange-traded funds, have gained immense popularity in recent years as investors seek more efficient and diversified ways to invest in the stock market. These funds are similar to mutual funds, but trade on an exchange like a stock. The number of ETFs worldwide grew from 276 in 2003, up to 8,754 in 2022.

Lower management fees: Robo-advisors have disrupted traditional fund management by offering a low-cost alternative. Robo-advisors have made it easier for novice investors to access professional-level investment management services. Compared to traditional human advisors who charge a management fee of 1-2% per year, robo-advisors charge a fee of 0.25-0.5%, making them a more affordable option for investors.

Social investing: In recent years, there has been a rise in social/meme investing. This is characterized by individual investors using social media to discuss and promote certain stocks or investment ideas. This trend gained momentum during the pandemic and has continued to grow, fueled by Reddit and Twitter. This has led to the creation of new investing subcultures and has been credited with driving up the value of certain stocks, most notably GameStop and AMC.

Pandemic Spurs 10 Million New Retail Investors

According to a survey by Charles Schwab, a large portion of retail investors began investing during the COVID-19 pandemic. The survey found that 15% of new investors surveyed started investing in 2020, with 45% of them being millennials. The pandemic-induced market volatility, along with stimulus checks and increased time spent at home, encouraged many to enter the stock market. The survey also revealed that these new investors tend to be more engaged and trade more frequently than experienced investors. However, many also lack knowledge and experience and may need education and guidance to make informed investment decisions.

The Next Big Wave

In the next decade, a substantial transfer of wealth is expected as baby boomers pass their wealth to heirs. Estimates suggest that the total amount of wealth to be transferred could hit 84 trillion in just 10 years. This is due to an aging population and the relatively high levels of wealth held by baby boomers.

According to a study, 75% of heirs plan to fire their financial advisors the same day they receive their inheritance. This is largely due to a lack of connection and trust with the previous advisor, as well as a desire for a fresh start and a new perspective on their inherited wealth.

How to Attract Investors and Capture Trillions of Dollars in Wealth Transfer?

My survey revealed that people want to have some level of control over their investments. But the problem is, they can’t always do that when they invest in ETFs or Robo-advisors. Furthermore, many individuals don’t have the time to research individual stocks or a lot of money to invest.

Here’s how we can solve this last mile of retail investing: granting investors the option to select a theme, such as “renewables,” rather than individual stocks like Tesla. They can then invest in dollar amounts using dollar cost averaging, eliminating the need to concern themselves with the number of shares to purchase. This approach empowers investors to exercise greater control over their investments, without the requirement for extensive research or a significant upfront investment.

Companies to Keep an Eye On

Public.com is a social investing app that aims to make the stock market more accessible and collaborative for all. With their new feature, Investment Plans, users can create baskets of stocks and set up recurring contributions. However, users are still responsible for researching and building their own baskets, which can be a tedious task.

Alinea is an investment platform that allows users to pick a premade basket, known as “playlist.” You can create, copy, or share playlists, fostering a social and collaborative investing experience. Although it is important to exercise caution to prevent inexperienced individuals from inadvertently influencing investment decisions.

Share Invest is a mobile and web app that empowers investors to pick premade themed baskets of stocks, known as “Strategies.” This frees investors from the hassle of individual stock research. With the option to set up recurring contributions as low as $5 per week, it’s like having a personalized piggy bank that aligns with your investment goals. As an SEC registered investment advisor, Share provides investors with added peace of mind.

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How many times have you seen an online quiz and thought that it was silly, but took the quiz anyway? Glad you joined the quiz craze. Are you in a relationship and wondering if you’ve “The One?” Take this compatibility quiz to find out. Ever wondered, “What Career Should You Actually Have?” (Buzzfeed), over 5 million people took the quiz to find out. “What City Should You Actually Live In?” (Buzzfeed), has over 20M views. 

Why can’t you say no to quizzes? Why were these quizzes created in the first place? And how you develop addicting quizzes to grow your business?

Why are quizzes so irresistible?

We take quizzes because we are obsessed with finding out who we are. Tribalism, or the desire to belong to a community or network (in modern-day terms), is part of our human nature, and we can’t help but quench this desire. Whether it’s your inner circle of close friends or your favorite sports team, your hometown, or your home country, you hope to feel connected. It feels good to belong somewhere, so we always want to find out what groups we are part of. 

Sometimes, we want to be part of a tribe so bad we don’t even care what tribe it is. In 1970, British psychologist Henri Tajfel experimented to prove this. He invited a group of 64 boys to take a quiz, revealed their quiz results, and separated them into two groups based on their findings.

While the boys believed that they were assigned to a group based on the quiz results, in reality, they were randomly assigned to a group. Afterward, Tajfel asked them to reward money to others, and the boys overwhelmingly favored the boys in their tribe. The results remained the same, even though people in their group were just randomly assigned.

The meaning of this tells us that while the results of the quizzes were not significant, as long as we feel we belong to a tribe, we’ll feel good. In other words, we just want to be part of a tribe whether it’s a sports team, a country, or even a Harry Potter character that brings people together. 

How to create a viral quiz.

What do viral quizzes have in common? After analyzing over hundreds of viral quizzes, this study shows that all the titles follow this formula: Which ____ are you?

The study shows that quizzes with this formula has twice as many views as quizzes without these keywords. Again, this shows that we crave to learn who we are and what tribe we belong to.

Make it personal.

Make the quiz as personalized as possible. The same study revealed that quizzes that use more pronouns like “you” have overwhelmingly more views than the ones without the pronoun. One of the most popular quizzes on Birdnest site is a quiz to help people find out what neighborhood best suits them. We made sure to include as many you’s and your’s in the ad, and it’s one of the best performing ads we have.

Keep it positive.

People want to find out who they are, but they’ll only want to share it with others when the quiz results make them look good or help bolster their self-image. When a few thousand tweets of quiz results were analyzed, over 75% of them contained positive words such as “great” or “excellent.”

Based on a study by The New York Times, 68% of people share and reshare content online “to give people a better sense of who they are and what they care about.” 

How can Marketers take advantage of this?

As a growth marketer, we face the daily challenge of gathering and delivering marketing qualified leads (MQLs). Asking people to fill out a form, no matter how simple the form may be, is hard. People are skeptical about filling out forms and are becoming increasingly sensitive about sharing their personal information. Individuals don’t like to give their names and email addresses unless they’re absolutely interested and ready to make a purchase. 

But when you give them a quiz to reveal some new information, they are eager to learn the quiz results and share the quiz results about themselves with others. 96% of those who start a Buzzfeed quiz finishes them. 

For marketers, online quizzes can be one of the most powerful marketing tools to generate leads. You can collect thousands of leads just by creating an engaging quiz. Online quizzes can also be a powerful filter tool to help qualify leads to ensure you are engaging with the right audience. 

Conclusion

Humans have an insatiable need to know who they are and what tribe they belong to. We are eager to answer questions about ourselves and share information about ourselves into an online quiz in order to find out the answer. If the results are positive, we will want to share it with others.

All these factors have helped online quizzes become one of the most viral pieces of content. The quizzes are not just for fun; they can be a powerful way to help your customers filter information. You can help your customers find out new and useful information.

Next time you’re trying to engage your audience, try creating an interactive quiz instead of sending them another piece of boring content that will never see the light of the day. 

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“Sell me this pen.”

That’s the famous quote from Martin Scorsese’s film, “The Wolf of Wall Street,” based on the debaucherous life of Jordan Belfort, a penny stockbroker. Belfort made a huge fortune before he was jailed for his shady business practices. In the film, Leonardo DiCaprio plays Jordan Belfort who challenges his colleagues to sell him a pen. With human vs. artificial intelligence, who wins at sales?

Can AI step up to the challenge and do better than humans in selling an everyday object like a pen? While it may not seem like a tough task, it actually takes experienced salesperson years of practice to sell anything to anyone. Who needs another pen anyway? With the advancement of AI and its ever-expanding role in sales, some people think AI can do better than humans in sales.

The jury is still out, so let’s compare AI and humans over 5 critical skills that separate a successful salesperson from the rest of the pact: empathy, listening, agility, critical thinking, and persistence.

Empathy

Empathy is defined as the “ability to walk a mile in another person’s shoes.” My favorite example is from Barter King, a TV show where people trade stuff without using cash.

In an episode, professional trader, Antonio, is trading a $200 handbag for fishing gear worth $1000. Despite the big price difference, the woman really wants the handbag and has little use for the fishing gear. But she hesitates because of her sentimental attachment to the fishing gear, which belonged to her grandfather who passed away. 

Antonio empathizes with her and tells her that he used to fish with his dad and assures her the fishing gear is going to a good home where it’s going to get used to catching fish instead of collecting dust in her garage. By walking in her shoes, Antonio successfully closes the deal. 

Emotion AI – emotional intelligence – has improved tremendously at detecting human emotions through facial expressions, tone or volume of voice, and so on. Shockingly, AI can tell if a person is a criminal simply by looking at their facial features, with an accuracy of up to 90%. While machines could detect human emotions, they will always be unable to walk a mile in another person’s shoes.

Winner: Human

Active Listening

Great salespeople are like journalists: they actively ask questions to discern what’s on a customer’s mind. 

In another episode of Barter King, Antonio is trading a $100 massage table for a $500 set of golf clubs. The owner of the golf clubs is reluctant to make the trade, again because of the dollar value gap. When Antonio probes her on why she’s looking for a massage table, she explains that she wants to start a home massage business and that the golf clubs belongs to her ex-husband. Antonio discerns her needs and convinces her that the massage table will bring her joy and make her money while the golf club will serve as a reminder of her ex and failed marriage.

Can AI be a better listener? You bet, Crisis Text Line, an AI that uses natural language processing to help people suffering from anxiety or suicidal thoughts, has exchanged more than 83 million text messages to date. What’s surprising is that 86% of those who exchanged text messages reported feeling better afterward despite the fact that they knew that they were not even interacting with another human being! Plus, AI is always there to listen, never zones out, and does not have to sleep, and has millions of data points to know when and how to ask the right question. 

Winner: Machine

Agility

Agility is about thinking quickly on your feet and outside the box. In “The Wolf of Wall Street,” when a salesman boasts that he can sell anything, Belfort pulls out a pen and challenges him to sell the pen. He takes the pen and tells Belfort to write his name on a napkin. Belfort can’t because he doesn’t have a pen! “Exactly, supply and demand my friend,” the salesman says to Belfort.

Still not convinced that humans are better at thinking outside the box? In 2016, Google’s AlphaGo played against the world’s undefeated Go champion, Lee Sedol, in the ancient and enormously complex Chinese game. AlphaGo, an AI system trained through millions of simulations, won the first three games. But in game four, Lee made a transcendent and beautiful move (dubbed as God’s Touch) that was completely outside the box and allowed a human to strike back.

Winner: Human

Critical Thinking 

Sales is becoming more science than art, and the best salespeople leverage data to move the needle. 

While humans can analyze hundreds or thousands of data points, machines can quickly analyze and find patterns through millions of data. Want proof? It’s all around us in our everyday lives. Google Maps calculates the fastest route. Amazon recommends the best products. Netflix suggests the best content. And Babylon, an AI doctor, diagnoses diseases more accurately than human doctors. 

Winner: Machine

Persistence

Our human side gifts us to be empathetic, but that also makes us susceptible to the negative effects of rejections. At Birdnest, we work with amazing real estate brokers and have seen even the most persistent ones get dejected after rejections. As a founder, I have tasted the bitterness of rejection from hundreds of investors and it can take an emotional toll.

But machines have the power to reject rejections. They don’t need to bounce back. They don’t need a mental health day. They don’t need a pep talk. They just keep going at it relentlessly without ever giving up or feeling dejected. Email automation tools always follow up with prospects and never takes any email filled with profanity personally. Chatbots are always on, eager to greet and chat no matter how late it is and how rude you are. 

Winner: Machine

Conclusion

So the next time you get the, “Sell me this pen” challenge at that tough job interview, make the interviewer’s jaw drop with this perfect answer instead of fumbling over words trying to sell a pen. According to Jordan Belfort, the perfect answer is to ask a question. Maybe something like this: “So tell me, how long have you been in the market for a pen?”  You can then identify the customer’s needs and what they’re looking for so you can turn it around on them. 

The jury may still be out on whether AI or humans are better at selling, but based on the five critical traits of a successful salesperson, looks like the machine has a slight edge over humans 3:2 in this best of five.

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Artificial intelligence (AI), simulation of human intelligence by machines, has become part of our daily lives. We are conversing with Alexa, getting rides from self-driving smart cars, receiving recommendations on music and movies, and playing games against computers. But what about applying AI in buying homes or renting offices?

Real estate seems to be a few steps behind when it comes to technology adoption, even though it is the largest asset class in the world, contributing $3.5T to the US GDP. But there are early signs that AI is already part of our home buying and office renting experience.

At Birdnest, we are seeing a growing demand from our customers for a better and faster experience. On the other side, we are seeing a growing number of brokers who want to start adopting technologies to provide a better experience. Here are three AI trends that every real estate broker should know.

Alexa, Answer the Call

A new study reveals that 48% of buyer inquiries never received a response and that the average response time from a broker was 917 minutes. In another study, 93% of buyers rated responsiveness as a very important quality. Brokers know this, which is why they usually team up on a deal so that when they’re busy, their colleague can respond to the inquiry. But what if no one is available? Enter the “Siri’s for real estate,” who are always available, 24/7.

OJO Labs, an Austin based startup who has raised $71M, is developing a real estate chatbot that answers potential clients’ questions about listing information via text message.

Like most people, I had a mixed chatbot experience. When I asked about HOA cost, it gave an accurate answer within 2 minutes. But when I asked a more open-ended question, “Is the neighborhood safe?” it didn’t understand.

Given that almost half the buyer inquiries never received a reply, this will certainly help brokers capture some of those leads. And with their recent acquisition of WolfNet, they have access to millions of additional data points to improve their algorithm. Their main competitors include Structurely and Keller Williams’ Kelle.

The Crystal Ball

Wouldn’t it be great if you can predict who will list a home or who will buy a home soon? When every broker is looking for that extra edge to win a deal, nothing is more important than having that crystal ball!

Rex, a Los Angeles based startup with over $70M in funding, is using AI to predict buyers who are most likely to buy a specific home. It sends out targeted ads based on who it thinks the likeliest buyers are. Then based on who clicks on the ad, it targets similar customer segments in future ads. In addition, the computer uses data from retailers and businesses to further improve its accuracy.

First, a North Carolina based startup with over $7M in funding, analyzes a broker’s contacts to “identify how much more likely than average your contacts are to sell in the next year.” During the pilot period with @properties, First predicted over 1,800 homes that listed during that period.

Reevaluate, another startup that predicts who is most likely to move within the next 3-6 months, claimed they have a 36.4% accuracy rate by analyzing over 200 data points, from spending habits to social news and more.

Goodbye Paperwork

As Benjamin Franklin once said, “Time is money.” This couldn’t be more true for real estate brokers, and one of the tasks that suck their time is paperwork.

Imagine how much time is spent entering information about a space, like its lighting, room types, kitchens to name a few. Thanks to Restb.ai, AI can automatically populate this information by analyzing a property’s photos. Its technology can classify images into 30+ homes scenes, recognize 16 architectural styles, and instantly tag 30+ valuable home features. Recently, MRED has partnered with Restb.ai “because it will save time and reduce hassle,” according to MRED CTO Chris Haran.

Leverton, a Berlin-based startup with $17M in funding, reads and extracts key information from corporate documents, leases, and contracts. All the broker has to do is to upload his documents, then AI starts to extract key information like “rent charges” and allow brokers to quickly search this information. For brokers, this means more insights in less time, a key reason JLL signed a partnership with them.

AI is here to assist brokers, not to replace them. AI technology is here to help a broker be more responsive. To save them time from paperwork so they can spend more time finding the right space for their clients. They are here to empower brokers to provide the ultimate experience for their clients and bring meaning to the statement that “real estate is a relationship business.”

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