It’s time for money managers to embrace real AI and stop paying lip service

AI is coming to institutional investing. A JP Morgan survey shows that 61% of traders see artificial intelligence as the most influential technology in their industry in the coming years, far outpacing other choices, such as blockchain-based trading or quantum computing.

For many, however, AI is just a buzzword – a term used to describe advanced technologies that everyone believes will shape the future. The question for investors – particularly those at large institutions that manage billions of dollars in pension funds, corporate bonds and other large accounts – is how they will use AI, what AI-based technologies they will apply to their portfolios and whether they will take full advantage of everything that AI can offer them.

More than instinctive decisions: it’s time to add science to the “art” of investing

The fact is that many fund managers are not using AI in such advanced ways. They often focus on a proven AI “guru” – one who, for example, knows how to apply machine learning techniques to a specific asset in order to predict market movements. By leveraging this person’s skills, investors and managers can achieve positive results – and for many, those results will be enough.

But limiting investments to a specific asset may not be the best idea. Markets go up and down, and if an asset is in a downward trend, even advanced machine learning could miss some of the factors causing those losses. Meanwhile, other assets could rise at the same time; Instead of shorting a losing asset in order to make a profit, it would make more sense to find an improving asset and invest in it.

This is therefore a reason for investment companies not to rely on a “guru” or individual applications of AI for specific purposes, but to use an advanced platform that examines a wide range of ‘investments, taking into account thousands of conditions, events and events. scenarios that could influence asset values. By using a platform like this, managers have a much better opportunity to improve their results.

How AI can help investment professionals find the best opportunities

So if a manager invested in blue-chip stocks – based on advice from an AI expert – they could deploy an AI platform that uses a wide range of technologies to investigate other stocks that might to carry more risks. Advanced AI technologies could provide data on how risky these higher-risk actions actually are. The AI ​​system would analyze massive amounts of data – current market conditions, business quality, government policy, consumer sentiment, geopolitical considerations, and much more – and compare it with past investment scenarios that resulted in gains or losses for similar actions. The system would then assess the risk of those stocks, allowing managers to take advantage of stocks that are likely to appreciate, and appreciate significantly, as higher-risk stocks often do when their value rises.

This same strategy can work for any type of asset – from commodities to bonds, real estate portfolios and cryptocurrencies. By analyzing large amounts of data, AI systems can provide managers with advice to ensure they choose the best assets to invest from a wide variety of possibilities. This goes well beyond what someone specializing in an AI technique can do for a single asset.

Platforms make it much easier to use AI to invest

And by using a platform, managers can avoid the expense of setting up an AI system in-house – or the hassle of working with external consultants, who may not have a clear picture completes the goals and objectives of a manager. Through a platform, managers can explore the best possibilities themselves, choosing investments based on their objectives and criteria – and maintaining full control of their investment strategies.

With huge sums of money to invest on behalf of institutions or clients – and a seemingly limitless range of assets to choose from – managers need a system that can help them generate profits. More and more professionals are realizing that AI can do this for them – but the best strategy in AI-based investing is to “go the extra mile” and not limit the use of AI to a specific asset or advice from an individual expert. By opening their perspectives to integrate many other types of investment possibilities, managers will be able to obtain much better results and offer more comprehensive services to their clients.