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TIP545: The Third Sea Change Has Begun w/ Howard Marks
We Study Billionaires - The Investor’s Podcast Network
Can AI Help You in Your Investments ?
Artificial intelligence (AI) can potentially revolutionize investment management by eliminating the need for human investment managers. The majority of equity mutual funds perform worse than the S&P, both before and after fees, leading to the rise of index funds. Passive management or indexation, where computers enact predefined rules, has become the dominant approach in mutual fund equity. Computers can process large amounts of data quickly and without making arithmetic or emotional mistakes. This ability has proven to be better than most people in terms of investment performance. As AI and machine learning get fully implemented, they are expected to further improve investment management. The last few decades have shown that it is becoming increasingly difficult for people to charge high fees for inferior results. Therefore, the role of AI in investment management is expected to grow in the future.
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