The DSR Network Siliconsciousness: AI and Investing: Ally, Enemy or Both?
Dec 5, 2025
Andrew Lo, a professor at MIT Sloan known for his insights into adaptive markets and AI in finance, dives deep into the intersection of artificial intelligence and investing. He discusses the balance of trust in AI, emphasizing the importance of human judgment in investment decisions. Lo highlights how using multiple AI models can enhance insights and mitigate errors. He also addresses the potential of AI to democratize investing while cautioning that it might widen wealth gaps due to disparities in technology access. Emotional intelligence in markets remains a crucial, yet often overlooked, element.
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AI Helps Institutions First
- AI already boosts institutional investor productivity by integrating diverse data sources.
- Retail investors risk delegating too much to LLMs before trust is earned through experience.
Earn Trust Before You Delegate
- Build trust in AI slowly by testing it across situations and time.
- Only transfer more decision-making to AI after you observe consistent strengths and known weaknesses.
Context Narrowing Raises Reliability
- Narrow scope and clear context increase where AI can be trusted for financial tasks.
- Use LLMs for specific informational tasks but avoid delegating final investment decisions today.