Last updated on June 23rd, 2023 at 07:21 am
INTRODCUTION
Today, big data is all-pervasive. It is easier than any time before in economic history to gain access to key market data and metrics to evaluate and bridge the gap between the risks and rewards with its proper analysis and deployment.
1. Abundant availability of good data enables better decision-making
Most experts concur to the view that big data and digital analysis is the foundation of modern-day investing. Many analytics tools allow investors to review useful investment information easily, make more accurate comparisons of consumer behaviors as well as market metrics and deduce their decisions based upon the facts. Thus, data best informs investors of the best risk/reward for deploying capital and how to structure a credit investment.
2. Data adds more value and visibility
Data helps investors to build on their experience and add value. Visibility through data also helps monitor, track and understand the performance of an investment as well as facilitate transparency. Greater visibility gives insight into where true margins are being generated — or where sustainable growth is coming from – can then make investors take better decisions about capital deployment.
3. Right tools enable better data assimilation
After data is collected and analysed, it’s important to be able to visualize it and take action on it. Building a customized, uniform strategy to clean that data and create a simple User Interface (UI) makes a savvier, data-driven team.
4. The pandemic created a need for accurate data and affected how we approach that data
The COVID-19 crisis created a stress test concerning our need for accurate data. It emphasized the need for reliance on customer behaviour, market data and investment performance.
5. What works best standardization or customization?
Data standardization makes sense across an asset class. However, there’s something to be said for customized data solutions: there are standard metrics you may want to know about every business or see how a portfolio company performs against its peers. Knowing what’s important to each business can help keep managers enthusiastic about adding value.
6. ESG is omnipresent and all too important
Environmental, Social and Corporate Governance (ESG) factors are important, not just with respect to data but as a factor in investment decisions also.
Conclusion
Data is constantly evolving. Analytics, AI (Artificial Intelligence) and machine learning are relatively new but, in the end, data does help investors make informed decisions: when is the right time to hold, buy or sell. The accumulation and right assimilation of data leads to better decisions and better returns.
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