Artificial Intelligence which is popularly known by its abbreviation AI has become of the most powerful technologies that we have today. It’s used in a variety of settings including, but not limited to: healthcare, security, data accounts, etc. Lately, it’s also started helping retail and institutional investors. The following are some of the ways how it’s going about that:
Robo advisors are AI-powered programs that guide people making investments. There is a slew of options in the market-leading people to often compare services like Wealthfront vs Betterment to learn about features like new investment options, portfolio rebalancing tools, retirement planning, etc. These programs have an AI program to take care of heavy analytics.
Artificial Intelligence has greatly enhanced customer service by giving rise to smart chatbots. For instance, there are AI interfaces and bots like Eno and Cleo that can have conversations with the customers and answer basic queries. Since many queries that are raised today are repetitive, bots can efficiently identify this and respond.
Online investment tools and services have made it easier for retail investors to create and maintain portfolios on the go. However, security has always been a concern for them as they need to protect their financial and personal information from hackers and various kinds of cyberattacks. This problem is now tackled with the help of AI as advanced programs can easily detect anomalies in transactions and unusual investment habits to prevent frauds and identity thefts.
AI-based investment software can help users to invest with excellent tax-efficiency. They use tax allocation strategies and directing equity investments in taxable investment accounts, and interest-bearing investments into tax-sheltered retirement plans.
It’s no secret that one of the best ways to become rich is to invest money in the right products. However, in the fast-paced world that we live in today, few people have the time that’s required to study the market, stocks, and other investment options to make the right decisions. This is why artificial intelligence is used in investment apps that can do the homework for the users. This way, the users just need to review the information collected by the apps and make appropriate decisions.
Portfolio rebalancing is important if you want smoother investment returns, review mutual funds in your portfolio with ease, and more. The problem is that many investors struggle with the idea and often spend long periods of time without adjusting the portfolio. However, AI is today helping them succeed in this endeavor by offering auto-rebalancing services. With this, a portfolio can be readjusted to a fixed allocation whenever its values change.
Assistance for Newcomers
It can be quite challenging for those who have never invested money before to get started from scratch. Then there are many who don’t really have an interest in investing even though they understand the value in the same. This is again where AI is coming to the rescue as it’s used by investment programs to understand the requirements of individual investors and create appropriate strategies so that their financial goals can be met while facing minimum resistance.
We humans are both flawed and made powerful with emotions that affect us on many levels. Talking strictly about investment, then emotions can often cloud our judgment and force us to make decisions that fundamentally lead to poor returns or loss of money altogether. For instance, it’s emotions that compel investors to buy when the market is high and sell when it’s low, even though that’s the opposite of what they should be doing.
AI is powerful because it’s purely based on facts, data, and results. So, it’s used by investors to make the right decisions for them based on information rather than emotions or “gut feelings”.
Human advisers can be quite knowledgeable and offer sound investment advice. However, their services can also be expensive which is why many people can’t afford them at all. AI-based programs, on the other hand, are easily affordable. They don’t require the users to invest a minimum sum which can vary depending on financial position.
AI-based services are available on the Internet or in the form of standalone apps for investments, personal finance, budgeting, etc. So, investors can access them anytime they want and anywhere. This is a big advantage for today’s investors who are often mobile most of the time.
As you can see, AI has changed a lot how investments are made today and related new-age apps have made the process faster, easier, and more affordable. That said, we have just scratched the surface now and there is a lot more to look forward to in the years to come.