Collective Wisdom and Social Investment Benefits
Every investment strategy has its moment of glory, and no recurring practice can prove invaluable time and time again. Seasoned investors who have acquired a high level of proficiency and a track record know that beyond your chosen secret formula, diversification is a critical strategy. They also know that long-term yields for real estate investment repeatedly outperform stocks.
The odds of creating a successful portfolio does not depend on choosing successful single project investments 100% of the time. In the world of real estate investments, there are a lot of factors that lead to pricing and market fluctuations. There are also different expert viewpoints relating to each specified deal in the local market. The key to a healthy investment outlook is being able to take in a diverse array of information from credible sources. Here enters the idea of collective wisdom.
The impact of collective wisdom
Collective wisdom dictates that the combination of multiple insights is better than a single insight. It is advantageous as it neutralizes subjective individual viewpoints and aggregates an outcome of many minds. In the book “Wisdom of Crowds” by James Surowjecki, the famous statistician Sir Francis Galton was taken aback by how an uninformed crowd at a country fair was able to correctly guess the weight of a slaughtered ox. The conclusion that Surowjecki delivers is that the median guess of a group outweighs the individual estimate.
The same experiment was conducted in a TED Talk by Lior Zoref, who illustrated that crowdsourcing the answer with a live audience in the 21st century reiterates the fact that a diverse audience could collectively guess the result. The collective guess of 500 people in the TED audience was that the weight of the ox on stage was 1792 pounds. The actual weight of the ox was 1795 pounds, a difference of only three pounds. This phenomenal outcome implies that if investors collaborate, the greater chance they have of nailing the right deal and achieving lucrative returns.
Social investment platforms harness collective wisdom
With social investment platforms, beginner investors who may not have all of the initial knowledge on how to start investing now have the opportunity to get informed. More importantly, they no longer have to invest alone, as they can enjoy the benefits of social investment networks. As it is hard to get going on your own, as a part of an online investors’ community, it is possible to reap the valuable insights of proficient investors and invest as a syndicate. Additionally, instead of doing your own arduous research, you can review deals on a project-to-project basis, which have undergone a rigorous underwriting process, and transparently follow what other investors actually invest in.
The pros of using iintoo’s online real estate social investment platform will empower investors in the following ways:
- Access curated deals from across the greater United States following a strict screening and extensive due diligence process.
- Utilize the collective wisdom of the iintoo community’s investors, which will increase the odds of investing in successful and high-yielding projects.
- It is possible to learn from the more experienced investors as you advance.
- Incur less risk by investing from as low as $25,000 in large lucrative projects, previously unavailable to unaccredited investors.
It’s to any investor’s benefit to take part in a large investment network that has the infrastructure, funding, market knowledge and professional team to efficiently deliver results. As a community, the value of the crowd’s combined wisdom will positively serve the investor’s portfolio and bring about success for the long run.