AI is suddenly all around us, stirring up emotions ranging from amazement to outrage at the capabilities on display. It seems as if every aspect of society is being affected by this new technology, and the world of investing is no different.
When it comes to investment planning, it’s easy to believe that these sophisticated models can outperform mere humans. The speed at which information is processed by these AI models is mind-blowing, with bespoke AI trading tools revolutionising high-speed trading.
Data accuracy and privacy concerns
With the technology, and the companies behind the technology, still unproven there are obvious concerns about balancing convenience and data privacy.
It’s like having a personal financial advisor in your pocket, helping you create a budget that works for you.
However, one of my concerns about relying solely on AI-powered insights or advice is the question about the accuracy and bias of these models. A financial provider can easily programme the tool to suggest products or solutions that are more in its favour than yours.
And, of course, there’s the ever-present danger of your personal and sensitive information being leaked if criminal hackers break through security systems.
Robo-advisers
You might have heard of robo-advisers – these are AI-driven tools that claim to create customised financial plans based on your goals, income, and spending habits.
For instance, if you’re planning for retirement, a robo-adviser can help you design a savings plan that fits your timeline and risk tolerance. These digital tools have been around for some years already, but are enjoying a rebirth on the back of chatbot and virtual assistant technology powered by generative AI models.
These have become so good that it’s sometimes difficult to tell whether you’re talking to a real human or a chatbot.
While robo-advisers can simplify investing, they aren’t perfect. They can’t replace the nuanced understanding a human advisor brings to the table: a human advisor might notice subtle details about your financial situation that an AI wouldn’t pick up.
So, while these tools are helpful, don’t rely on them entirely. Keep building your financial literacy and consult with a human advisor when you’re unsure.
One way that AI can benefit you as an investor is to invest in the right AI stocks at the right time.
Source : BizNews
