How can artificial intelligence be used in investing?

by Times of India

Published On Sept. 17, 2022

In this article

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 .

To learn more about artificial intelligence, check out these articles

  1. What is Artificial Intelligence and its use in Investing?
  2. History of AI and Investing in AI in India
  3. How to Use AI in Investing
  4. Using AI to create a Mutual Fund Investing Platform

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