The world of investing has been rapidly evolving due to the emergence of artificial intelligence (AI) which has the potential to revolutionise global investments by providing investors with unparalleled insights, improved accuracy, and increased efficiency. With a nod to the Monty Python question ‘What have the Romans ever done for us?’ this blog explores how AI is disrupting global investment opportunities and why executives should be paying attention to its disruptive potential.

Increased Accuracy in Investing Decisions

It’s a bold statement to make, but many believe that AI can provide investors with more accurate predictions and better decision-making capabilities. This is possible due to the ability of AI algorithms to process large amounts of data quickly, identify patterns that might be difficult for humans to spot, and accurately predict future market trends. Simplistically, AI algorithms can analyse past stock performance and use that information to create predictive models for future investments. This kind of analysis allows investors to make more informed decisions on where they should allocate their capital. 

For anyone who is nervous about the use of technology making decisions in this important area, the ‘human predictor’ isn’t 100% perfect either.

Human predictions

For those who fairly point out that technology makes mistakes, here are a few examples of human predictions which were somewhat wide of the mark. In 1937 Nikola Tesla – after whom the electric vehicle brand was named - wrote “I am convinced that within a century coffee, tea, and tobacco will be no longer in vogue,” While smoking is a habit that’s waning, it’s still popular with around one billion people.

More frighteningly, one prediction in 1955 by Alexander Lewyt, American inventor and entrepreneur was that “Nuclear-powered vacuum cleaners will probably be a reality in 10 years,” He doesn’t have an entry in Wikipedia so it’s reasonable to assume that the idea didn’t catch on, which is something of a shame for him personally as the global vacuum cleaner market size grew from $8.96 billion in 2022 to $9.99 billion in 2023 at a compound annual growth rate (CAGR) of 11.6%. 

The data that AI can capture is both global and nuanced, with the capacity to include macroeconomic indicators such as GDP growth and employment figures, as well as microeconomic factors such as company performance and stock prices. By leveraging AI, investors are able to more quickly identify trends in the market that could potentially yield profitable returns. 

It’s all about data

AI also provides investors with a much more comprehensive view of global markets than was previously possible with access to real-time insights into global markets and events that may have an impact on their investments. With AI-driven algorithms, investors can quickly sort through vast amounts of data from multiple sources and identify patterns that may indicate potential investment opportunities. The speed at which AI can do all of this is especially important when it comes to making decisions about volatile markets where conditions can change rapidly. 

This means that investors no longer need to rely solely on their own analysis or on advice from analysts; instead, they can quickly and efficiently identify promising investments across the globe using AI-powered tools staying ahead of the curve by getting up-to-the minute insights into changes in market conditions. 

So does AI override the years of experience human insights can offer within Asset Management? And in turn, does that reduce their margins and ability to invest effectively? Or can AM’s adapt deeply and quickly enough to join forces with technology for better outcomes?

Improved Efficiency in Investment Strategies

The use of AI-driven tools also provides investors with greater efficiency when it comes to managing their portfolios. By automating certain processes such as portfolio rebalancing and risk management, investors can save time while still ensuring that their investment strategies are aligned with their goals. Additionally, AI-driven tools can help investors stay on top of current market trends and take advantage of new opportunities as they arise. But can the term efficiency, adequately be factored into the algorithms driving ESG investing?

More Opportunities for Global Investments

There is little doubt that the use of AI in investment strategies can provide investors with more opportunities for global investments. With access to data from all over the world, an investor armed with an AI algorithm can easily diversify their portfolio across multiple markets in order to mitigate risk and maximize returns. This level of access opens up a whole new world of possibilities when it comes to investing globally. Perhaps the opportunity for the AM community is in connecting the way things were with the way things are going to be in the future?

Conclusion:

Artificial intelligence is changing the way we invest in global markets by providing us with unprecedented levels of accuracy and efficiency when it comes to making informed decisions about our investments. The market has two choices when it comes to using AI; be afraid of it or be aware that this technology could potentially transform the way we invest in the future by providing us with more opportunities than ever before when it comes to global investments. In either case, it is critically important we all stay informed about these developments so we can take full advantage of what AI has to offer when it comes to investing in global markets.