Financial markets are increasingly becoming part Australia’s wealth generation mix. Nearly half of the adult population holds investments outside of their home and Superannuation Funds.1 Yet, many are beset by two challenges: they make emotional investment decisions and cannot keep up with the deluge of market data.
Emotions cloud our judgement. According to one study, investor panic resulted in a loss of 8-15% of assets over a 10-year period.2 Volatility exacerbates the problem. The fear of loss leads people to sell when prices are low, while greed leads them to buy when prices are high. This vicious cycle can be detrimental to your investment goals and, often, your future.
The never-ending flow of data doesn’t help. Trying to make sense of price movements, analyst reports, news sentiment, corporate filings, macro-economic indicators and many other data points is exhausting and can lead to analysis paralysis. Less experienced investors are most affected.3 As the mountain of available data grows, so too does the challenge.
It is not surprising that Australia’s investors struggle with market volatility, fear of investment underperformance and difficulty identifying the best companies.4 Where managers and advisors were once the only solution, advances in technology have paved the way for cheaper and more convenient pathways to overcome these challenges. AI is chief among them.
Building A Well-Balanced Portfolio With AI
Institutional investors have been using AI to generate alpha for years. A recent study shows that AI-led hedge funds in Europe produced cumulative returns of 34% in the three years to May 2020.5 That compares with 12% for the industry globally. While AI-powered investing tools were once exclusive to investors, now you can use AI to achieve your investment milestones.
Jaaims is among the most powerful solutions available. Using the power of AI, it analyses 10 million pieces of data from over 250 different news, financial data and social media sources in real-time. The app updates its stock recommendations every 15 minutes as it wrestles information overload into submission. Even in volatile markets, Jaaims can identify attractive investments.
Trust and simplicity are central to Jaaims. Your money never leaves your brokerage account. Once plugged in, the app automates trade execution, removing emotion from the equation as it optimizes your investments. You can use Jaaims to manage a portfolio of your favorite stocks, a subset of your portfolio, or take a set-and-forget approach using one of the app’s portfolios, which boast double-digit percentage returns.
As wage growth stagnates,6 house prices continue to rise7 and the concentration of wealth among younger generations remains underwhelming,8 Jaaims makes investing in financial markets the perfect complement or an attractive alternative to residential property. And while one study shows that residential real estate generated slightly better returns than a diversified portfolio of Australian shares over a ten-year period, that portfolio was not powered by non-stop AI optimization.9 Jaaims brings that advantage to your portfolio.
Its Model Portfolio, which targets trending sectors during periodic growth cycles, realized a return of 14.7% from its inception on 1 July 2020 through 31 March 2021. Over the same period, its Smart Portfolio, which focuses on stocks that demonstrate strong earnings and growth potential supported by high human emotion conviction, realized a return of 26.5%. Both outpaced the 14.4% rise in the S&P/ASX 200.
Take Control of Your Retirement
Accumulating wealth for retirement is among the biggest motivations for investment. Yet, two-thirds of Australians feel unprepared for retirement.10 As life expectancy increases and the cost of living goes up, many are not prepared to make ends meet in the longer term.
The Association of Superannuation Funds of Australia (ASFA) estimates that the lump sum needed at retirement to support a comfortable lifestyle is A$640,000 for a couple and A$545,000 for a single person.11 That covers everything from “good clothes” and “owning a reasonable car” to “top level private health insurance” and ability to “take part in a range of regular leisure activities.”12
While compulsory superannuation enables Australians to achieve a retirement income that better reflects their pre-retirement income, the extent to which Australia’s renowned pension system meets the financial needs of retirees leaves room for improvement.13 14 Comfortable retirement often requires investments with higher yields and steady returns.
Here, too, Jaaims can make a meaningful difference. With its unique ability to connect to your Self-Managed Superannuation Fund, Jaaims empowers you to generate the returns that you need to live well and retire early. Leveraging this institutional-grade quant solution makes the ASFA’s lump sum retirement figures achievable.
Whether you are among the 43% of Australians who are saving for a big-ticket item15 or you have retirement on your mind, Jaaims will enable you to realize your goals today, tomorrow and further down the line. With those who sign up before June 30 eligible for an end of financial year tax deduction, there has never been a better time to invest in your future.