Dubai: Artificial Intelligence (AI) has become one of the hottest technologies, especially in recent months. But does this science of machine learning apply to your money and investment problems?
AI, the ability of digital computers or computer-controlled robots to perform tasks commonly associated with intelligent life forms, is already widely applied in stock trading and investing.
Brody Dunn, investment manager at a UAE-based wealth advisory firm, said, “When it comes to investing, AI systems are already useful, especially due to their ability to process vast amounts of information and analyze them in real time. It has been proven to be,” he said. .
“AI can help improve stock market forecasts by facilitating rapid and accurate exploration of massive data sets. improve, reduce risk exposure and increase profits.”
When it comes to investments, AI systems are already proving useful, especially due to their ability to process vast amounts of information and analyze them in real-time mode.
– Brody Dunn, Investment Manager
Investors experiment with AI funds
Industry experts are already experimenting with AI-built portfolios and investment strategies, and how this trend will continue to grow, especially for companies building portfolios from scratch with AI to reap significant returns. is evaluated.
“As in all industries, a great way to invest in AI is through relevant funding. In fact, there is currently a surge in Artificial Intelligence ETFs. There are a lot of companies out there trying to take advantage of the companies that do business,” added Dunn.
What is an artificial intelligence ETF? The AI ETF (Exchange Tracking Fund) reflects the growth of companies involved in the development and production of robots and AI. The world’s largest ETF is the Global X Robotics & Artificial Intelligence ETF (BOTZ) with an investment of $1.72 billion (Dh 6.32 billion).
But such funds include a wide range of companies related to industrial robotics, automation and self-driving, not just AI. However, if knowing this makes you interested in starting your AI-powered investment journey right away, here’s what you need to know.
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How do AI-powered investments work?
With AI investments, you can choose how much money to allocate, but you can also let the AI do the work for you. Either way, AI handles all investment assets. It also provides a more comprehensive analysis of stocks and ETFs through rapid and thorough investment research and source verification.
But can AI technology be used for market research? “AI technology learns the history of all securities in a selected fund and identifies factors that influence prices. We will weigh our investments so that we can allocate user money in a way that will work,” Dunn added.
“In AI investing, users can also get automated financial advice by using deep learning technology to make trades on your behalf. , the AI is responsible for managing the rest, the holdings within the fund.”
But while AI’s ability to do in-depth investment analysis gives us better forecasting and forecasting skills, it’s not foolproof. Since AI investment predictions are highly data-dependent, the quality and quantity of data have a significant impact on the accuracy of predictions.
So while companies with access to valuable datasets, such as data giants like Facebook, Alphabet, and Visa, have great advantages, companies without such access are less trustworthy.
Can AI help reduce impulsive investments?
AI now enables the average investor to assess the factors that affect the performance of an investment, continue to invest, sell or buy accordingly, thus providing financial knowledge once limited to a select few. provides access to This allows investors to make more informed and unbiased decisions about whether to sell or buy an investment, rather than making investment decisions based on emotion.
Risks associated with investing in AI
With AI, investors may also see investments become increasingly cyclical, which also threatens to burst the bubble. “The long-term potential of AI is very compelling right now, but for short- or medium-term investors – those looking to stick with investments for less than five years – there is a risk of a bubble in AI-related stocks. There is, ”explained Zubair Shakeel. , an asset management company based in the United Arab Emirates.
“For example, US-based digital media company Buzzfeed surged 300% after using ChatGPT to generate content, and AI companies also surged in the news. If this is a bubble, there may be better opportunities elsewhere for AI investors.”
But does that mean long-term investors stand to benefit from their investments in AI? I agree, flagging certain factors.
“The true value of investing in AI comes from investing in businesses with AI models that can be monetized effectively. We encourage you to research how you will make money from your investment and make decisions based on that,” he added.
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important point
If you’ve been confined to costly financial advisors for sound financial advice, and you no longer have discretionary funds or need to use them in your wealth manager, use AI to find financial benefits can be obtained.
“If you are not very confident in your investments, you may see news headlines stating that companies in your investment portfolio are under certain threats. But this could later be seen as a mistake,” Shakeel added.
“It is when these market impulses can be resisted that AI investments are most useful. You can save a lot of money.”
So, especially when making decisions in a fast-paced field like investing, AI can help make more data-driven decisions in less time, even if research is too difficult for novice investors. becomes possible.
But questions remain about how much of the management of investment assets can ultimately be handed over to machine intelligence. For now the answer is simple. As with all other investments, AI means of investing have proven to be an effective way to diversify and allocate some, but not all, funds. At least not yet.
