How can artificial intelligence be used in investing?

Artificial intelligence (AI) is revolutionizing the field of investing, offering transparent and flexible solutions for new-age investors. It has surpassed traditional models and human managers in various areas, providing better results in alpha generation, risk management, extracting alternative information, and improving operational efficiency. AI-driven advisors are solving critical problems faced by investors, from asset allocation to reducing trading costs. Globally, asset managers, brokerages, hedge funds, and robo-advisors are increasingly adopting AI, and the research in this field is expanding rapidly. In India, AI is blooming in investment management, empowering data-driven investors and asset managers for more efficient and rewarding investing experiences.

“Artificial Intelligence can create a competitive edge to extract actionable insights in the complex framework of the financial markets with their ever-changing dynamic nature, hundreds of noisy factors affecting performance, and non-linear interactions.”

- Sonam Srivastava, Founder, Wright Research

Here’s a gist:

• Investing is a field that can benefit greatly from the power of artificial intelligence (AI).

• Traditional models in investing are often simplistic and heuristic-based.

• Millennials recognize the potential of AI to democratize investing and provide access to tools previously available only to Wall Street professionals.

• AI has already surpassed humans in various fields and can extract valuable insights in the complex and dynamic financial markets.

• AI is increasingly being used by global hedge funds and becoming more mainstream, with robo-advisors utilizing automated, algorithm-driven models for investment optimization.

• AI-driven investing offers transparency and flexibility, solving critical problems such as asset allocation, stock selection, and reducing trading costs.

• Key areas where AI is used in investing include alpha generation, risk management, extracting alternative information from unstructured data, and enhancing operational efficiency.

• In India, AI is still emerging in investment management but shows great potential to outperform traditional models and managers.

• AI's ability to process large datasets and account for complex interactions makes it a valuable tool in investing for data-driven investors and asset managers.

• The evolution of the investing field towards greater efficiency and rewards is driven by the influence of AI and the new generation of investors and asset managers who are data-driven.

Read the full story here .

Other interesting articles to explore to understand artificial intelligence in detail:

1. AI Meets Finance: Revolutionizing the Indian Stock Market with Machine Learning Insights
2. Revolutionizing Investment Strategies: The Role of AI in Finance and Decision-Making
3. Artificial Intelligence in Investing
4. How to use AI for Investing in Stock
5. Revolutionizing Investment Strategies: The Role of AI in Finance and Decision-Making
6. Artificial Intelligence Stocks in India: A Look at 2024's Top Players