What Does the Future of Personal Investing Look Like with AI At the Helm?
By Dan Rawitch, CEO and Head Trader at University of Options
It is impossible to intelligently talk about the future of investing without also talking about Artificial Intelligence (AI). AI’s impact on the financial landscape is undeniable, and its influence is only poised to grow. As an investor who has written a successful trading algorithm using current AI, I’m here to delve into how AI is revolutionizing personal investing and what exciting possibilities lie ahead.
Leveraging AI to Trade
One of our trading algorithms has been returning double-digit monthly returns and it has done this for several months. This accomplishment highlights the power of AI in making data-driven decisions, especially when it comes to the benefit of investors. AI algorithms can analyze vast amounts of financial data in real-time, identifying patterns and trends that human investors might miss.
For investors of any level, staying up-to-date with AI technology in the investment world can be a game-changer. Recently, I used an AI-enabled tool to identify a micro-cap company, a small company with a low market capitalization, that was undervalued but had solid fundamentals. This company, trading for less than five cents a share, was a leader in the healthcare space! We took a position in the company, and within a week, the stock price doubled. Here’s the key takeaway: we used an AI algorithm to determine the optimal moment to sell half of our position, locking in profits while allowing the remaining shares to potentially grow long-term.
This is just one example of how AI can be used to make smarter investment decisions. As AI technology continues to evolve, we can expect even more sophisticated tools that can help us identify undervalued gems and capitalize on market opportunities.
Analyzing Big Data with AI
“Big Data” has been a buzzword for years, but its capacity is only now being unlocked with the help of AI. Big Data refers to the massive datasets that are constantly being generated in today’s digital world. This data includes everything from financial news and social media sentiment to company earnings reports and market trends.
The sheer volume of Big Data is overwhelming for human analysts. However, AI can sift through these vast datasets, identifying patterns and insights that would be impossible to see with the naked eye. This allows investors to make more informed decisions based on a comprehensive understanding of the market landscape.
We are seeing a surge in companies developing tools that leverage AI to analyze Big Data. These tools can condense thousands of data points into a manageable database, allowing investors to quickly and efficiently research potential investments.
The number of investing tools that have emerged just in the last two years is overwhelming. Personally, I use some of these AI-powered tools to analyze hundreds of companies in minutes, a task that previously could take days. Finding a successful stock pick now requires minimal research, and I predict this trend will continue, becoming easier as years go by.
The Democratization of Investing with a Human Touch
One of the most exciting aspects of AI in personal investing is its promise to democratize the market. In the past, access to the best investment research and tools was often limited to wealthy individuals and institutions. However, with AI-powered tools becoming more affordable and accessible, the playing field is starting to level. This means that even individual investors with limited resources can now compete with the big players. By sifting through vast datasets, AI can identify previously unseen correlations and trends, leading to the recommendation of potentially lucrative investment opportunities that traditional analysis might overlook.
However, it’s important to remember that AI is a tool, not a replacement for human judgment or oversight. While AI excels at analyzing data and identifying patterns, it cannot replicate the intuition, experience, and deep understanding of the market that successful investors possess. The most successful investors will be those who can leverage the power of AI while still maintaining a healthy dose of skepticism and critical thinking. AI can be a valuable partner, providing insights and automating tasks, but the ultimate responsibility for investment decisions lies with the investor.
It’s a Fun Time to be an Investor and a Trader!
From an investor’s perspective, the emergence of AI in personal finance presents a compelling opportunity. AI-powered tools are rapidly transforming the investment landscape, offering investors unprecedented access to data analysis and market insights. These advancements can significantly enhance the efficiency and effectiveness of investment strategies. As an early adopter of AI in my own investment activities, I have witnessed firsthand the positive impact on decision-making and potential return generation. For those seeking to navigate the complexities of the market and achieve their financial goals, I strongly recommend exploring and leveraging AI-powered investment tools.
Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.