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Bloomberg: The AI-Powered Path to Investment Success

Date: May 20th 2021

Financial markets are always in motion. Every minute, millions of transactions worth billions of dollars take place. Each has the potential to tip markets in one direction or another. Keeping track of it all is impossible. This begs the question: How can individual investors generate wealth and hedge risks amid dizzying volume, value and volatility?


To arrive at an answer, first we must understand how financial professionals approach this challenge. Asset managers study a broad range of market data to make investments that generate alpha. For stocks, that historically entailed interpreting financial information disclosed in company filings, macroeconomic data, industry trends and analyst reports—a full-time job in itself. And while market data remains the starting point, today it is just the tip of the data iceberg.


The explosion of alternative data since the turn of the millennium has created incredible new opportunities and equally daunting challenges. Internet searches, social media posts, satellite imagery, mobile app analytics, geolocation data and other alternatives lend to company and industry insights that help asset managers identify attractive investments. The smallest insight can give asset managers an edge.

As the volume of real-time data increased beyond what is humanly possible to track and analyze, asset managers faced a huge challenge that continues to plague individual investors: information overload. In turn, their investments sometimes suffered from bad timing, hidden risks, volatility and more. To overcome those challenges, asset managers turned to technology.


Making Sense of It All With AI

Today, asset managers use AI to facilitate several aspects of the investment process from balance sheet analysis and interpreting alternative data to identifying risks. As the volume of data continues to increase, AI has become integral in enabling asset managers to identify attractive opportunities at scale.

Where does that leave individual investors? Once resource intensive, prohibitively expensive and hard to come by, AI-powered investment solutions are no longer exclusive to asset managers and other financial professionals. In fact, a range of solutions is available for individual investors. Among the most powerful is Jaaims—a first-to-market fully automated trading app that connects to your brokerage account.


Jaaims empowers individual investors to overcome information overload. Using AI, it analyses 10 million pieces of data from over 250 different news, financial data and social media sources in real-time, updating its stock recommendations every 15 minutes. In this way it transforms the deluge of market data into an abundance of opportunities. And it does that faster than humanly possible. On average, Jaaims analyses a stock in just 73 seconds.


Simplicity is the ultimate sophistication, according to Leonardo da Vinci. Here, too, Jaaims delivers. Once the solution is plugged into your brokerage account, it automates trade execution, constantly refining your portfolio to maximize returns. Your money never leaves your brokerage account. Jaaims can manage a portfolio of your favorite stocks. Alternatively, you can follow its own Model and Smart Portfolios.


The Value of AI in Today’s Markets

Perhaps the biggest problem with investment returns is that they are never enough. In fact, the average individual investor in Australia expects annual returns of 11.9% above inflation. By contrast, financial professionals say 6.4% is realistic.[1] To achieve lofty returns, individual investors may take on excessive risk.

Generating returns in today’s markets requires caution and patience. The end of a decade-long bull run is fueling a rotation from growth to value. Reflation threatens to end the era of accommodative central bank policy. And the re-opening trade continues to whip markets around as investors balance the global vaccine rollout against concerns about mutations in the Covid-19 virus. These and other themes lend to volatility—a force that six in ten individual investors says undermines their ability to achieve savings and investment goals.[2]


Against this backdrop, a combination of inexperience, nerves and unrealistic expectations can result in investment regrets. This is where Jaaims shines. Through the power of AI, Jaaims coolly navigates the financial landscape, separating the signal from the noise. The track record of its automated trading portfolios drives the point.


The Model Portfolio, for instance, employs a high-growth strategy that targets trending sectors during periodic growth cycles. From its inception on 1 July 2020 through 31 March 2021 the portfolio realized a return of 14.7%. Over the same period, the Smart Portfolio, which focuses on stocks that demonstrate strong growth potential supported by high human emotion conviction, realized a return of 26.5%. By contrast, the S&P/ASX 200 rose 14.4%, the FTSE 100 rose 9% and the DAX rose 22.4%.


While an old adage suggests that past performance is not indicative of future results, Jaaims can help you to maximize your returns. Whether you are just starting your investment journey or have years of market experience, by harnessing the power of AI, Jaaims empowers you to invest like a pro.


Read full article on Bloomberg.com

[1] Natixis [2] Natixis