A revolution is taking over the world of technology! Artificial Intelligence (AI) has announced itself as THE NEXT BIG THING. While ChatGPT is still the topic of intense discussion across industries, AI has already set out to do something new. After chatbots, data analysis, and content generation, we now have AI Investment!
Can AI be helpful in Investment?
AI has shown its ability to handle complex analysis for any data set available. This is a humongous step up from the role of text-based generative technology that it is often seen as. In a data-intense, complex and pattern-heavy field like investing, AI is showing wonders! Let’s take a quick look at a few things that AI can help with in the investment process:
Thorough Analysis
A considerable amount of analysis goes into building a perfect investment strategy. From data to risk to even market sentiment, AI can analyse indicators of the market’s movement. The ability to handle such large data gives AI investment that extra edge!
Predictive Modelling
After AI analyses a set of data, it can use this new set of information to generate stock market predictions. This ranges from market trends, the prices of various stocks to even the performance of key investments. This helps investors identify potential AI investment opportunities.
Portfolio Management
AI investing also provides you with the added benefit of portfolio management options. Here, AI-driven systems can do three things:
- Optimise your spread of investments,
- Optimise their proportions, and
- Rebalance your investments as the need arises.
These needs could be based on pre-defined investment strategies and current market conditions as well.
Risk Assessment
Various factors like macroeconomic indicators, a company’s financial health, regulatory changes and market volatility affect an investor’s investments. AI can track, assess and quantify them into comprehensible and measurable qualifiers. Investors can thus, review and compare the risks to the rewards of their investment opportunities.
Automated
AI runs 24*7. AI can observe when market conditions match your investment strategy to work best. And at that moment, it can conduct fast, accurate and effective transactions, even if you are sleeping!
Detecting Fraud
AI is constantly analysing large volumes of information. Furthermore, it is also studying the data for patterns. That’s how AI-powered systems can detect potential frauds or market manipulations at the earliest. Protecting your interests was never this AI-xciting!
Customer Centric
AI investing keeps the customer first. Various tools like chatbots, virtual assistants and more help AI achieve this feat. AI can help answer customers’ queries, give them personalised investment advice, and help them plan their finances.
Why Should I Use AI For Investment?
We wish all investors were as thorough about their investment opportunities as you are with AI investments! The answer to that lies in the following identified advantages that using AI for investing has shown to bring to the table.
Round-the-clock presence
Let’s do a simple exercise. Consider the best investment advisors, managers, experts and individual investors across the world. Who in that list do you think, can track, analyse, comprehend and break down current market conditions at any given time, night or day? You got your answer right there!
Powers of Prediction
Analysing the market requires a HUMONGOUS amount of quantitative data! This analysis is then translated into actionable insights. And that’s how an investment strategy is born. Doing this needs an unimaginable amount of time, energy, expertise and access. Especially in cases where accuracy is super important! And that’s where decision-making in artificial intelligence trumps any other entity and agency.
Automation
A few makers of a good investment advisor include:
- Keeping track of the changes in the market
- Understanding the implications of the changes
- Reviewing and adjusting your investment strategy to ensure they achieve the desired result
- Managing your portfolio entirely.
Can you imagine the time, energy and money this would cost you? Massive! That’s where AI investment makes life easy. Pre-feed your desired strategy and goals, and watch the system take over the responsibility to do that, all on its own! Now isn’t that just perfect?
Emotion Proof Investing
As humans, we sometimes get emotionally driven. Add significant and/or monetary gain and loss to the mix, and greed and fear find a way to creep in. But, using AI for investing brings a decision-making authority that is calm, cool and collected in the face of turbulence. Hence, AI can help you make rational and collected decisions instead of impulsive actions.
Conclusion
As you have seen, AI is here to help us out in more ways than one. Now we have access to AI investments as well! Artificial Intelligence investment management systems have brought artificial intelligence and investing together. Will AI investments always outshine non-ai-based investments? No. But are they a smarter, faster and more efficient place to start? Hell yes!
FAQs
AI Investment used various data types and sources. This includes
-Historical pricing,
-Company financials,
-News from the market,
-Sentiments noted on social media, and
-Macroeconomic indicators.
While AI predictions are valuable, we need to remember that stock markets are still volatile. Although AI investment uses patterns and trends, human advisors sometimes have an edge over them. This ‘X’ factor of an advisor’s intuition and judgement can complement AI’s insights.
AI-powered chatbots can be extremely helpful. They can review investment products, by giving personalised advice and complete information. This is because they give precise answers and assist in financial planning. That’s why AI investment decisions based on these chatbots rank high.
AI investing is backed by the analysis of news articles, social media posts and other information sources. Furthermore, Natural Language Processing (NLP) techniques are employed to determine positive, neutral and negative sentiments around specific markets and stocks.
Relying solely on using AI for investing can cause you to make several mistakes:
-Potentially over-relying on historical data,
-Missing out on unforeseen situations,
-Relying on biases stemming out of algorithmic thinking and,
-Losing out on precious human judgement and intuition.
