The world has become a global market and political, cultural or financial developments in one part of the world can have a critical impact on your investment…
For example, a small article in the newspaper about developments in North Korea can have an impact on your investment in the USA. Point being made is that there are a host of factors that you need to consider when investing in Endowment funds and you must look beyond the traditional historical data.
The endowment industry is complex and the factors impacting the returns could be more personal than you think… For example- the background of the fund manager, his risk bearing aptitude and more could have a significant bearing on your earnings. Therefore, it is imperative to derive actionable insights leveraging the power of data before you invest in endowment funds.
But here again, it must be pointed that when we talk about actionable insights, we are not talking merely about data collection. Rather, just data collection does not lead to any solution and may simply add to the confusion. A systematic approach that collects, collates and curates the maze of data need to employed to arrive at specific information, which is then analyzed and translated into clear, crisp actionable insights.
For this, the starting point is descriptive analytics which summarize the data from social media platforms. The next is predictive analytics, wherein the existing data is used to predict trends, sentiments etc. Then comes the prescriptive analytics that creates a model from the existing data, uses actions and insights to drive at the desired outcome.
Several data touch points from social media platforms are collected and curated to arrive at the predictive analytics. One of the most popular predictive analysis is the sentiment analysis… This takes into account the likes, dislikes, aptitudes, habits and behavior in to consideration. Here it is the descriptive data such as comments, tweets are analyzed to form an opinion.
Next, the KPIs are matched with the prescriptive analytics… It is almost like joining the dots… If you want to achieve the KPI, this is the path that you must follow. So, all you do is join the dots, follow the path to achieve your goals.
Thus, to get the best value for your endowment funds, you need a combination of descriptive, prescriptive and predictive analysis that tells you precisely what action you need to take to achieve the desired results.
In stark contrast to the traditional methods, where you probably checked just the past track record and made future projections based on certain business information and development, in the new era of Big Data Analytics, we take cognizance of several other behavioral factors- the human aspects, the opinions, habits and activity of the fund managers, the global factors that are likely to affect the investment and growth of the fund and so on to arrive at the actionable insight.
Big data analytics is the way the world is going to make better, informed decisions. It has a lot of promise especially in risk mitigation.