Artificial Intelligence Investing is transforming investment strategies

Artificial Intelligence Investing

Artificial Intelligence Investing  Will Dominate the Finance sector

Due to exponential increases in computer power and data storage over the past couple of decades, we have witnessed the rise of artificial intelligence systems that meet and exceed human abilities. At the forefront of recent A.I. technology is an approach termed machine learning. In the financial services world, insurance firms and investment banks have employed ML-based systems to automate areas such as claims processing and contract validation.

The asset management industry will be no exception.

ML has begun to make inroads as asset managers realize that the ability to extract value from big data is going to be a key differentiator and that traditional industry practices will struggle to stay afloat in this mounting flood of real-time data. Analytics using ML can be more robust than traditional financial modelling, as it can tap into the streams of “unstructured” (text-based) data that global digitalization and social media are creating, in addition to the millions of corporate press releases, conference call transcripts and regulatory filings that are produced every year.

With the industry in a state of flux due to the rise in passive investing and the move away from commissions to level fees, many asset managers are investing heavily in technology to reduce operating costs and to comply with regulators’ ever-increasing demands for transparency.

Leading asset managers are realizing that this also presents a solid opportunity to invest in advanced data analytics and ML capabilities, as well. With the fixed-income bull market coming to an end, fund managers need to begin to implement new investment strategies, reorganizing their operations around next-generation investment systems.

Asset managers are using predictive analytics to generate investment ideas or as an early warning system for assets at risk. At a minimum, A.I.-enhanced data analytics can complement traditional financial analysis by offering unique insights. Full story

These systems will eventually trigger flash crashes that will make the flash crashes of the past look like Child’s play.  The biggest danger is programming computers to think like humans; most humans are wired to react like lemmings, and these systems will only increase market volatility. A day will come when daily moves of 1000 points in the Dow will become the norm unless Fiat is eliminated. However, we see no chance of that occurring in the near future. Fiat is being embraced with gusto; the masses have been conned into thinking they need to make more and more money, without realising that all of this money is created out of thin air. Imagine the beauty of this system; the top players can create money out of thin air or via their connections have access to virtually unlimited credit. The average person has to work harder and harder for less and less.  This link provides enlightening data in terms of how corrupt America is today and how the rich control the US. Full Story

Artificial Intelligence Investing is Transforming Investment Field

AI and machine learning are enabling asset managers to “assimilate new information more quickly and accurately into their portfolio construction processes,” says Bryan Kelly, professor of finance at the Yale School of Management and head of machine learning at AQR Capital Management. As computing power has increased, so has the financial industry’s ability to capture and analyze data with increasingly rich statistical models. This “translates into a better prediction of future economic outcomes, which helps investors better allocate wealth to the most productive opportunities and better manage the risks of their portfolios,” he says. In short, smarter computers make for smarter investors. Full Story

Other Articles of Interest

1987 stock market crash anniversary discussions- nothing but rubbish ( Oct 24)

Dow 22K Predicted In July 2017; Next Target Dow 30k? (Oct 15)

Anxiety and Greed Index Don’t Support Stock Market Crash  (Oct 14)

Fed States Inflation is not an issue?  (Oct 13)

Is Bitcoin a Bubble or Good Investment?  (Oct 9)

Stock market crash; best time to buy stocks   (Oct 6)

Nasdaq’s Achievement Topples Stock Market Crash Argument  (Oct 5)

Stock Market Crash 2018; Another Buying Opportunity  (Oct 5)

Masses Trained to fear Market Crashes; why not embrace them?  (Sept 27)

Buy When the Blood in the Streets is flowing Freely  (Sept 13)

Dow 21K Predicted In August 2016 (Sept  9)

Minimum wage hike ignores the impact of AI; companies will opt for Robots  (Sept 8)

Should You Be Worried About Inflation Rate In 2017? (Sept 6)

Wage Deflation here to stay: Robots Replacing Workers (Sept 5)

Price of Copper Signalling Inflation or higher Stock Market Prices (Sept 4)

Rate of Inflation, not an issue according to Bond Market (Sept 2)