.png){kind=logo}
- Insights
- Cryptocurrencies
- Stocks
- White Papers
- Industry
- Geography
- Insights
- Cryptocurrencies
- Stocks
- White Papers
- Industry
- Geography
AI in investing is all about human empowerment. This article explores how artificial intelligence changes the investing process for the better. Keep reading below to find out more!
Artificial Intelligence isn't coming. It is already here, behind almost every activity people do today, from searching on Google to getting relevant news on Facebook and big brands' product recommendations. AI is even revolutionizing how people manage their finances, including investments.
A decade ago, no one believed that asking a robot to tell you the weather for the day was more than a Sci-fi scenario. And, yet, today, it is a reality. It's just as hard to believe today that we'll soon be able to tell Alexa, Siri, or whatever AI-powered personal assistant will be out there in a couple of years to buy stocks or enter a trade for us. Yet, this scenario is actually closer than most people believe.
Here's how artificial intelligence is improving investing:
Image source: https://unsplash.com/photos/DfjJMVhwH_8AI makes investing fast
Investing is an ever-changing environment. Investments of all types, be it cryptocurrencies, Forex, stocks, or traditional investment methods, are all influenced by everything that's happening around the world, from political to economic crises and even natural disasters. And, when these changes occur, investors need to act fast for the sake of their money.
Here's a recent example, the US Senate recently passed a $1 trillion infrastructure bill. This is one move that surely had significant implications on the stock market. However, the bill was no smaller than 2,701 pages that would take a person several hours to read and make informed investment decisions for stock trades.
That's one example where AI can help. Artificial intelligence can summarize significant but essential documents with critical insights and metrics within seconds, empowering investors to act fast to protect their investments or multiply their money.
Making great market predictions is one of the surest ways to make profitable investing decisions. But, making such predictions also involves a lot of knowledge and research, which again takes time and plenty of resources from investors.
AI is a game-changer here as well. Artificial intelligence and machine learning can quickly assimilate new information more accurately and turn it into stats and data that investors can use for predictions. Better predictions translate into better economic outcomes.
simply because investors are not rational as they enter a trade, buy stocks, or sell their digital assets based on an emotional response. Unfortunately, all types of investors, from Forex traders to crypto traders or institutional investors, are all susceptible to behavioral bias.
Artificial intelligence can also act as a defense against those emotional responses that make investors irrational. When an investor loses money, they might either enter a risky trade or walk away from a pretty obvious win. Similarly, an investor that wins a significant amount of money might allow his emotions to dictate their investment decisions, which might expose them to a bigger risk of losing money.
In contrast to humans, AI isn't susceptible to such emotional responses and poorly made investment decisions as its predictions are based on actual data and statistics. Therefore, when investors listen to their AI-powered investing advisors, they are more likely to make rational investing decisions.
Wouldn't it be exciting to ask your virtual assistant to enter a trade for you? Or maybe you'd want to ask Alexa or Siri to give you information about Brexit's influence on all the UK forex brokers instead of spending hours researching this yourself? Luckily, AI slowly eliminates the need for even a basic keyboard for you to invest.
Voice-activated investing tools, driven by artificial intelligence and machine learning, are revolutionary tools that allow investors to place trades, research markets, and even stay up-to-date with their portfolios. With voice-activated tools, investors can stay on top of their investments and financial education virtually anywhere, even while commuting, because in-vehicle AI-driven assistants are a thing now too.
Sounds excellent to check your account balances and investment performances while on the go, right?
Investors aren't the only ones benefiting from AI's presence in the investing world. So do financial advisors.
AI helps foster better advisor-client relationships easier. Artificial intelligence can automate various aspects involved in client relationships, including initial communications to risk profiling and all the legal documents that are required in the client-advisor relationship.
Using AI-driven information tools, financial advisors are empowered to simplify how they access, secure, process, and collaborate on documentation with their clients. What's more, artificial intelligence also allows them to find and access information faster. Ultimately, better financial advice services lead to improved investing decisions.
Between studying markets and making profitable investment decisions, investors are left with very little time to be proactive in terms of managing their portfolios. AI can help here too.
It is nearly impossible for a human investor to evaluate all of the market factors that can impact their portfolio performance. But the good news is that investors don't even have to do all this leg work because AI-driven tools can do it for them.
Together with predictive analytics, AI can track and evaluate various macro- and micro-economic indicators, regulatory trends, and social sentiments and provide investors with predictions that empower them to make proactive portfolio rebalancing moves.
Last but not least, artificial intelligence helps investors mitigate risk easier and better.
All investors know that risk-reward ratios are essential to consider when deciding where to put their money next. AI can help predict future patterns more accurately, which helps improve risk-reward ratios for investors. AI-driven tools can determine financial risks by analyzing historical and live time data to identify future patterns in the moves of a market, currency, or asset.
