Artificial intelligence (AI)pops up in many places these days.
But, there also is AI-powered investing.
An increasing number of brokerages are advertising AI-powered investing.
It combines data analytics with the human expertise you get from an investment advisor.
Some investment apps, likeMagnifi, offer it as well.
But is it a reliable way to invest your money?
Well break it down for you.
What Is AI-Powered Investing?
The line between human and artificial intelligence has blurred in recent years.
Machines are able to spot patterns and make decisions based on input.
Its pattern recognition has led to something called predictive analytics.
It takes what it learned about the past to make decisions about the future.
But these days, AI-powered investing can work as a team with human advisors to gather data.
But lets not forget, AI is a tool at its core.
Robo-Advising vs. AI-Powered Investing
Its as easy as ever toinvest on your own.
With so many platforms available, you might start a trading account in no time.
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One option that emerged recently is robo-advising.
Robo-advisors use AI to help you reach your goals in a more automated way.
Youll be relying solely on the algorithms to steer you in the right direction.
AI-powered platforms are there to help the investor or advisor.
Platforms likeWealthfrontandVanguardprovide robo-advisory services with low fees, and will even help with strategies like tax-loss harvesting.
Some experts actually like the lack of human intervention.
Choosing a broker means looking at reputation and specialties.
But a broker who uses cutting-edge tools brings benefits, too.
Here are some things to keep in mind if you decide AI-driven trading is the right choice for you.
Stick with the usual: trustworthiness/integrity, communication skills/listening, client-centric, detail oriented, etc.
AI-powered investing comes with risks, but it also comes with rewards.
And a dose of healthy caution is warranted.
Daniel Kroyter, founder of merchant account providerTailoredPay, believes that for beginner investors, education is crucial.
Understand the Tools
As useful as artificial intelligence can be, humans are still behind the wheel.
How useful the tool is still depends somewhat on the user.
In the right hands, it can remove human biases to help experts accurately predict the market.
However, no piece of technology is perfect.
Stephanie Faris is a professional finance writer with more than a decade of experience.
It sounds appealing right?
Check it out here!
