Historically speaking we, the everyday people, have always had far less access to certain data than those at the top; i.e. the bankers and investors who rule over the stock market with a watchful eye. Thankfully something is changing all of that.
Fintech, the branch of start-up technology that deals with the financial sector, is opening up the world of data, and bringing disruption to the stock market.
This disruption favours the everyday investor, by bringing more relevant and richer data to our fingertips.
The big problem
Investing in stocks, in itself, isn't too difficult. Anybody who can pay the fee can join a stockbroker and purchase stocks.
In some cases, stockbrokers offer information on the stock market that can help you make the right decision, though you will be asked to pay the price for a premium service.
It is also possible to purchase stocks directly from companies who offer them, in what is known as a direct stock purchase plan, which allows you to cut out the need for a broker.
So, what's the problem?
The problem is this: the bigger players are not messing around with bits and pieces of information about the stock market.
They are playing the numbers game using rich data, which they have exclusive access to. This is no conspiracy, but simply a matter of affordability.
I speak of the Bloomberg Monitor, though there are other elaborate computer systems and software programs in existence that offer a similar service, such as the Thomson Reuters, Infront terminal, SIX Financial Information, and more.
The Bloomberg Monitor is the world's most renowned stock market data system. For $24,000 a year, you can have one of these bad boys set up, and gain access to all of the information that you need to make the most strategic stock market decisions.
Those who have access to such a system can see live data on the latest trends, company data, news feeds, public opinions, and more.
As a new investor, or someone who is thinking about taking a look at the stock market, this should set off alarm bells. Information really is king in the stock market.
Understanding why information is key
There has long been a debate about the difference between investing and gambling, and in some cases it can be difficult to really pull them apart.
For the sake of argument, it can be said that gambling is a form of risk taking in something that is wagered based on chance alone.
Investment also involves risk but, if it truly is an investment (and not a punt), then the wager is based on information that suggests that profit is likely, and that the potential for return justifies the amount of money pledged.
Put simply, to make an investment, you need to have access to relevant data that can lead you to make a decision that is expected to yield a profit. Otherwise, you're gambling.
A return is never really guaranteed with any investment, but certain factors may suggest that a company is experiencing a period of growth, or that they are likely to do so in the future, or that they are performing well.
Knowing every detail of the factors that affect stock prices helps top investors and investment bankers make more accurate predictions, and therefore achieve more profitable results.
The access that they have to data systems, such as the Bloomberg Terminal, gives them a worrying head start.
As beginners in the world of the stock market, there are ways to gain some helpful information without the price tag.
This was not the case at all a couple of decades ago, when the only way to gain any relevant info on the stock market was to subscribe to a stock research company, or to pay a stockbroker.
The situation improved when the internet allowed for greater freedom of data, and easier accessibility of stock market trends.
Finding stock market information
For example, there are simple data feeds that give a basic level of information.
A similar amount of information is offered for free over at Bloomberg, ironically the same company that charges high fees for access to the super-rich real-time data feed that they are capable of offering.
Freedom of data has already broken down the barriers to entry a little. The stock market is more penetrable now than it ever has been before.
Hardly any stock market data was available to the public before the internet, and now it is possible to source together at least some information that can help you to make wiser and more profitable investment decisions.
However, the level of stock market data you gain access to through these channels simply doesn't compare to the depth and breadth of data used by elite traders.
Freedom of data with fintech
This is where Fintech comes into play. It brings the next level of freedom of information.
With greater and more abundant open-source technology, everyday people are given the opportunity to deal with their finances outside of the control of those who would rather not give away their powerful data.
Fintech usually refers to technology that changes the way the financial sector works. Take mobile banking for example, which negates the need for the traditional bank setting.
Consider even more revolutionary technology: such as peer-to-peer lending software, which reduces the need for loan companies; crowdfunding, which allows for direct investment in projects; and cryptocurrency, which challenges the need for us to trade with bank notes.
New technology is exposing the data-rich world of the stock market, revealing crucial investment information to the general public.
This benefits those who are seeking to enter the stock market with confidence, beginners who want to approach stocks as investors and not as gamblers. The financial sector, widely regarded as the most difficult to disrupt, has finally been given a real shake.
Take fintech company Betterment, which offers a user-friendly platform for useful stock market advice. Then you have newcomer Robinhood, which opens up trading with a fee-free approach.
This serves to level the playing field. No, this technology cannot automatically make you a stock market expert, but it can give you access to data that is as rich as that which investment pros use.
These new technologies are based on freedom of data, and all of them cause massive disruptions to the established norms of the financial sector.
One of the main effects of the growing power of fintech is its tendency towards democratisation.
Services that were previously only available to an elite, were withheld deliberately, or tagged at a price that is completely unaffordable to anyone who isn't a banker or a broker's firm, are now at our disposal.
As developers and programmers advance the technology, and make it more available and accessible, we can only hope that freedom of data will cause more disruption to the stock market, and that it will remove the barrier to entry and level the playing field, allowing intelligent new investors to play the game fairly against those who are sitting on their Bloomberg terminals.
Tomer Garzberg is a growth hacker and blogger at INDX.guru.