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How Algorithms Have Changed the Face of Wall Street

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Wall Street High Frequency Trading HFT

How Algorithms Have Changed the Face of Wall Street

In these modern times, it feels as if everything (and sometimes, everyone) is being replaced by electronics and computers. The financial industry is no exception. Algorithms have changed the way investors are trading on the stock market and it has made the process incredibly efficient. However, in addition to the benefits of technology in trading, there have been many problems that have come to light.

Through the increased capabilities of advanced computers and algorithms, high frequency trading (HFT) is made possible. High frequency trading is the rapid trade of stock and securities through use of advanced computer tools and algorithms.

While proponents of HFT would argue that they provide liquidity to the market and decrease overall costs, it has also arguably put mom and pop investors at a disadvantage when competing with investment banks and hedge funds. Quite simply, individual investors do not have the technological resources or the proximity to keep up with the speed their larger counterparts trade at.

Financial journalist, Michael Lewis, recently released an expose book, Flash Boys, which focuses on HFT in the American equity market. Mr. Lewis’ book suggests that “the market is rigged” and that stock fraud is rampant through the illegal practice of insider trading.

In the wake of the media storm surrounding the release of the book, the FBI, US Department of Justice, and the New York Attorney General’s office have all launched investigations into HFT practices. The New York Stock Exchange was even fined $4.5 million for charges related to Lewis’ book.

In one famous case of Virtu Financial, the HFT firm lost money on only one day of 1,238 days of trading. With instances like this, retail investors have to ask themselves who is really making the big bucks in the market.

Original infographic from: QuantConnect.com

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Personal Finance

Ranked: The Best U.S. States for Retirement

Getting ready for retirement? See which states score the highest in terms of affordability, quality of life, and health care.

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Ranked: The Best U.S. States for Retirement

What is the most important aspect of retirement planning?

If you said finances, you’re probably right. But have you ever thought about where the best place is to retire? Being strategic about location can make a big impact on your quality of life, and perhaps help your savings go just a bit further.

To help break it down, we’ve visualized data from personal finance platform, WalletHub, which ranked the best U.S. states for retirement as of 2023.

Data and Methodology

WalletHub ranked each state using 47 metrics across three dimensions.

  • Affordability (7 metrics worth 40 points)
  • Quality of Life (22 metrics worth 30 points)
  • Health Care (18 metrics worth 30 points)

Here are some examples of what each dimension measures:

  • Affordability: Cost of living and taxation
  • Quality of Life: Quality of elder-abuse protections and crime rates
  • Health Care: Number of health professionals per capita and life expectancy

Visit the source for the full list of metrics.

The final scores (visualized as the bars in the infographic above) represent each state’s weighted average across all metrics. See below for more comprehensive results.

RankStateScoreAffordability
(rank)
Quality of Life
(rank)
Health Care
(rank)
1Virginia57.6161111
2TFlorida57.49428
2TColorado57.414275
4Wyoming55.65938
5Delaware55.563318
6New Hampshire55.03157
7South Dakota53.625309
8Minnesota53.54021
9Idaho53.2151731
10North Dakota53.0222520
11Utah52.7202426
12North Carolina52.6122335
13Missouri52.4172832
14Pennsylvania52.336312
15TMontana52.1241529
15TSouth Carolina52.143839
17Massachusetts51.94712
18California51.6321910
19Alaska51.326368
20Arizona51.1183525
21Wisconsin50.9341417
22Alabama50.714450
23Ohio49.827837
24Hawaii49.738294
25Nebraska49.3371615
26Iowa48.9351224
27Georgia48.674042
28Michigan48.0291836
29TMaine47.543613
29TNew Mexico47.5214630
31Indiana47.3233140
32TNevada47.2114241
32TTennessee47.224845
34TVermont47.14876
34TConnecticut47.144263
36Kansas46.8303233
37West Virginia46.434349
38Oregon46.1412121
39Texas45.9283734
40Rhode Island45.0393914
41Arkansas44.784944
42Maryland44.6462019
43Washington44.5451323
44Illinois44.3422227
45Louisiana43.9134547
46New York43.7501016
47Oklahoma43.6194743
48Mississippi40.8105048
49New Jersey40.2493422
50Kentucky38.8334146

According to this methodology, Virginia is currently the best state for retirement. Although the Southeastern state does not excel in any one dimension, it scores consistently well across all three to create a very balanced retirement profile.

This gives it a slight advantage over second place Florida, which excels in quality of life and affordability, but falls further behind in terms of health care. Third-placed Colorado is a mirror of Florida, offering excellent health care but a lower quality of life in comparison.

How to Interpret These Results

It’s important to remember that this ranking is purely based on data and the methodology above, and may not be tailored to your individual preferences.

For example, if you believe that health services will be very important during retirement, you may rank Minnesota (#1 in terms of health care) much higher than eighth place.

You may notice that prioritizing one dimension will often come at a trade-off in others. Looking at Minnesota once more, we can see that the state is also one of America’s most expensive.

Looking to retire outside of the U.S.? Check out this graphic on the top 25 countries to retire in.

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