Being a Hockey player myself I have endured the pain of watching Indian hockey go downhill for over two decades.
India once a super-power with 8 Olympic Gold Medals finds itself struggling to cope with the demands of the modern-day hockey whose landscape has completely changed to include advanced technology – right from the playing field to player training.
It’s happened in sport after sport, from Cricket to Kabbadi, Carrom to Chess, Football, Archery, Shooting; you name it and we have seen that use of tech. has changed the way the game is played.
Successful are those who have learnt to adapt and embrace new methods. Traditional teams were simply outgunned and outmuscled. Nano seconds became the difference between success and failure. All this with the help of technology!
It’s no different for Investment Advisory!
Traditionally, investment advisory and it still is to a large extent dependent on the ability of the human mind – that of the investment manager who with his vast experience crunches humungous amounts of data and arrives at the best possible portfolio for your investment basket. That’s probably the reason why financial institutions still advertise the name of the fund manager in bold, proudly declaring the success rate of the individual behind the funds success.
The problem
When you depend on the human mind to make decisions on your behalf, especially so for such important ones like your life savings – the risk of cognitive and emotional bias cannot be understated. Your investment plans get influenced by the investment managers appetite for risk-return.
What’s changed?
Artificial intelligence and Machine learning has brought about a seismic change in the way investment advisory works today! It aims to cut the biases of the human mind and use tech. to help you make investment decisions which guarantee long-term sustainable returns for your hard-earned money.
The fact that its humanly impossible for the investment manager to profile and understand each investor – their risk appetite and temperament, makes it all the more important that technology is used to cater to the needs of individual investors.
Human personality is very complex and their response to day-to-day life events is so difficult to predict just by talking to them for a few minutes. How then can you expect the investment manager to do so with each customer?
What can be done?
Use of artificial intelligence and machine learning has transformed portfolio management and investment advisory landscape completely. It has started to help investment managers to create customized suiting each of their customers uniqueness.
Not knowing your investor as a personality is a mistake you can ill afford!
Investor profiling and the resultant advisory models help you remain consistent and eliminate biases which could ruin your relationships.
“Humans are simply incapable of giving up on their biases. Even I can’t”
Daniel Kahneman
