Can AI beat all stock market?

Your next investment decision can be made on the account of the hypothesis or analysis by AI bots. Tata mutual fund launched India s first AI-driven quant fund to beat the market and remove human bias from affecting choices on the BSE index. This is not a new concept and in the US and Europe many agencies have such type of product already available in the market

AI is not coming, it is already there, and the bigger part of the game is how and when AI will disrupt financial services.

AI/machine in 1987, banks were using AI systems to detect fraud with debit cards. First, a new investment chapter was opened by the invention of computers and then the internet came into the picture, exchanges were computerized, the introduction of online brokers, cryptocurrencies, and trade robots. Human traders and robot traders coexist together in the current scenario. To model credit ratings and identifying fraud, fintech start-ups have already started using machine-learning algorithms. Hedge funds and high-frequency traders to make investment decisions are using AI. IBM's Watson represents a technology that has been flying on the internet on the stock market for a long time.

Information is invaluable, and for every company, every individual who understands and operates these systems would be a very valuable asset. The spread of capital is uneven due to many factors like birth, region, inheritance, etc. Innovation has long supported and raised individuals out of poverty created new markets and new ways of doing business. In areas ranging from risk management, trading, underwriting, and claims, AI may drive operational efficiencies.

PayPal algorithms mine sets of data from the transaction history of a client and reviews possible fraud trends stored in its growing databases. These improved features help PayPal separate innocent transactions from suspected transactions.

Today Robo- advisor is providing automated algorithm-driven services with minimal cost, minimal human supervision, tracking the market, and are available 24*7. They are helping the clients by cost-cutting their time and money Up to 80%.

Smaller wealth management companies to simplify their investment management, minimize costs/fees, and compete with Robo-advisors add algorithmic components. On the other hand, established investment firms are buying existing Robo-advisors, or creating their Robo-advisor solutions.

To simplify their investment management, reduce costs/fees, and compete with Robo-advisors, smaller wealth management companies are introducing algorithmic components. On the other hand, established investment companies are acquiring existing Robo-advisors or develop their solutions for Robo-advisors.

Electronic market algorithms have already displaced a variety of execution traders worldwide and individuals who model prices and risk or who build investment portfolios. Morgan Stanley made a research report of more than 41,000 research reports from its analysts using AI. Deep learning algorithms programs and patterns showed whether a report made by the analyst is positive or negative on the stock.

Technology such as big data or AI has helped in finding two solutions. 

• Processing new large sets of data based on historical data and build a predicting model that could not be processed due to technological limits. ·
•  The method of identifying data that were not done before.

AI and big data is the future of investing. Machines can do much more now with AI, including analyzing and, processing texts, images, sets of data, and summarizing them. Human beings have limitations and cannot process all the data out there, but computers can come near, and helping to make conclusions. For example collecting daily news, social media posts on a specific topic, and then summarizing whether these are stronger positive or negative opinions. Traders now can access real-time information at very much pace on different topics and take actions accordingly as quickly as possible.

Chabot’s, Artificial Intelligence Decision Algorithm Automated Claims Processes, Optical (OCR), Algorithmic Trading, Augmented research tools, Valuation Models, and other AI-based solutions has simplified the processes, operations, customer satisfaction has taken the financial market to another level that is simplified and cost-friendly too. Financial intermediaries are using AI as a competitive trading tool. Yet humans will be required to oversee and manage AI trading. Decisions will be still made by humans but these decisions will be well informed and backtested with data.

There is also growing concerned among the market that an AI can do something on its own that can cause systemic disruption, such as causing a flash crash. Markets are complex meaning there’s a lot of noise in the data and thus need a different approach. The danger in these types of systems is that machine learning is trained on a set of historical data, and with a change in the system, the relationships between the data changes. Sometimes because the decisions the system makes can’t always be explained in simpler terms. The abilities needed to perceive and look out for the warning signs of AI failures will be difficult to identify and fill this gap. The secret possibly lies in data mining (deep customer insights and AI- guided trading).

We can make two hypotheses here:

• Artificial intelligence will beat humans.
• Humans will beat Artificial intelligence.

As an investor, you cannot ignore the fact that you are part of the market. Technology is the pinpoint in the process of development and you have to adjust yourself accordingly. The indication that “you can’t beat the market” is too negative and your presence will do nothing in the market. Capitalism’s greatest threat is its progress. The technology capitalism has created is actually destroying it. This is why we need to rethink it. The biggest challenge from capitalism is its growth using these technologies. This is why we need to rethink our approach. Putting simply the use of AI can save money, achieve a high level of perfection, or tackle competition. It is the need of the hour as machine learning and AI is coming, and it is coming fast to disrupt the market. If we failed to decode now and develop our collective minds, then AI will not give a second chance, sometimes it can be devastating too and could have serious trouble and affect the reputation of the financial system.

The other truth is that AI is the most misunderstood topic and has been a source of fascination from science to philosophy. It was overlooked for decade’s needs serious discussion on the pros and cons related to this topic.