Living in the 21st century means that we have access to more financial tools than we even know what to do with. From desktop-based applications to those that live on our mobile devices, investing, saving, and spending is easier than ever. One of these amazing tools is digital wallets, which are used by millions of consumers these days.
If you’re someone who is following the golden rule of investment i.e. diversifying your portfolio, you’ll want to get your hands on a digital wallet. This is to aid in your financial transactions and simplify your portfolio.
What is a Digital Wallet?
A digital wallet is a cloud-based application that allows you to store payment information and complete transactions remotely. This allows for quick retrieval of this payment information and seamless financial processes. Think of your Apple or Google wallet and how different payment information is stored there. Also, think of your PayPal wallet and how it allows you to spend both your PayPal balance and from your various bank accounts. If you’re using crypto, you likely have a digital wallet that shows your digital asset balance at any given time. Needless to say, digital wallets have become a major draw for investors of all types and this shows no signs of stopping.
How They Help Investors
So, we know what digital wallets are, but how do they help investors who have diversified portfolios? Here are a few ways:
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Purchasing Assets Instantly
When you have a portfolio filled with many different assets, you might want to buy new ones at many points. After all, keeping your portfolio diversified will include topping up your stash of an existing asset or buying a whole new one. The good thing about digital wallets is that they not only act as storage but also as a platform for purchases. Take PayPal, for example. The platform allows users to buy more of a specific asset or crypto with ease.
This also applies to crypto-specific wallets. Many are linked to exchanges, which means that tokens can be bought very easily. As Shraddha notes, the best wallet review will often mention instant purchases of all sorts of cryptos. This makes digital wallets essential for investors because, as their portfolios will need to change, they can adapt to meet these needs.
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Checking Portfolios at a Glance
The upside of having a diversified portfolio is that your risk is spread, and your potential profit is maximized. The downside of having such a portfolio is that it can be hard to keep track of what assets you have and how much of them you have. This is especially true if you have assets across multiple different platforms and accounts.
But digital wallets can help with this as most offer a summary of your assets at any given time. By simply logging onto your account, you’ll see the assets you hold, how many you hold, and what they are worth. Many digital wallets even let you connect your holdings with different platforms in one place. This means that you can see your stock, pension, crypto, and other assets at a glance, with no need to go through several different login processes.
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Metrics and Other Features
It is one thing to be able to look at all of your assets at a glance and quite another to make sense of them. In the worst-case scenario, you might see a bunch of numbers and letters that don’t mean anything to you, and that is a horrible state to be in as an investor. The good news is that digital wallets come with a plethora of tools designed to simplify your assets for you. An example of this is the symbols that tell you how much an asset has gained or lost in the last hour, day, week, and so on. This lets you know which assets are doing good or bad. Some wallets also let you sort by highest-performing and lowest-performing assets, and this is especially important when choosing assets to add or remove from your portfolio. Other features you can access include price alerts, news feeds, and much more.
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Asset Transfer
A big part of managing a diverse portfolio is moving assets from one account to the other. Oftentimes, this includes logging into one account and then moving it to the other, maybe even logging into two or more accounts for this process. However, digital wallets are a lifesaver in that they typically allow you to move assets from one account to another with no complex login process. And because, as we’ve mentioned, they allow you to see all your assets at a glance, you’ll know that the transaction has been successful. If you’re someone who needs to do a lot of asset transfers, this is essential.
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Instant Transactions
Besides buying new assets from your digital wallet, you can complete other transactions. You might want to sell your existing for money or swap them for another asset. If you’re using assets like crypto, you might want to lend or stake them.
Rather than having multiple different assets for all of these, you can complete them from a single app. This saves you time, allows you to quickly take advantage of market movements, and much more. Of course, to access this, you’ll need to choose a digital wallet that comes with all of these features.
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Convenience
Sometimes, all you need to easily navigate a diversified portfolio is to have access to it at all times. Digital wallets offer this by being available for a variety of mobile devices, such as phones and tablets. This means that you can log into your wallet to view and complete transactions at any time. On top of this, you can set up push notifications so any changes in your portfolio can be addressed immediately. By removing all roadblocks to accessing your portfolio and keeping it with you at all times, you can supercharge your investment journey and maximize your profits with time.
