Investors come to the stock market to make big money. However, the majority fail to do so for N different reasons. One of the biggest problems with investors is that they keep adding stocks to their portfolio, hoping each will bring higher profit to the portfolio. However, the stock market return does not work this way. Investing is an art, and stock portfolio management is a crucial aspect of this art.
Portfolio management has evolved over the years. Today, many companies are using AI for stock portfolio management and maximizing returns for their investors. We will look at AI stock management in detail in this article.
Understanding stock portfolio management
Before we bring AI to portfolio management, let us understand the term in detail. The first step is stock portfolio creation. A stock portfolio is a record of your losses and gains. Building a healthy stock collection is a step-by-step process.
Before you select stocks for your portfolio, you need to determine your risk profile. You will have peaceful nights when you create a portfolio based on your risk profile. Once you enroll on the Jarvis app, you will get to know your risk profile at no cost.
Stock portfolio management is concerned with allocating stocks to a portfolio while downsizing the risk. More importantly, it is about matching goals to outcomes. It requires you to analyze potential risks related to different stocks available to you.
It helps investors achieve their financial goals, as it provides strategy and solutions based on the needs of investors.
Portfolio management to the next level
We mentioned above that portfolio management is an excellent tool for investors to achieve financial goals. However, there is a problem with it. It is an art, and not everyone is an artist. Not everyone can learn it and implement it in their financial journey.
There are two solutions to the problem – first, you get in touch with professional fund managers and seek services for portfolio management (PMS). The second option is to use technology to maximize your returns through portfolio management.
The first solution has a problem, which we will discuss in the next section. The second solution is one that most investors are adopting. Artificial intelligence makes portfolio management accessible to the masses.
Limitation of fund managers
The first problem with fund managers is that they are super costly. They charge you a lot. Even if you have the money to afford a professional fund manager, you will have to bear with their limitations.
Professional fund managers spend hours analyzing stock data and deciding which stocks are perfect for their clients. However, at the end of the day, they are humans. They need to take a week off, can miss key data points, and make general human errors.
When it comes to portfolio management, AI is several steps ahead of what humans can achieve, and we have only recently started.
Maximizing returns with AI portfolio management
Now that some companies across the globe are using AI for investing, we have data to confidently say that an AI portfolio can do better than an average investor portfolio. Below are some reasons how AI help maximize gains and are better than traditional fund manager:
- Your returns increase if you lower your charges or fees. For example, professional fund managers charge you a hefty fee. AI-based systems are super pockets friendly. Therefore, once you start using it, you maximize your gains upfront.
- AI systems can scan the entire internet and build an excellent model to help you filter and select stocks. A more detailed analysis translates to a higher chance of maximizing your gains.
- AI’s ability to analyze millions of data pointers helps AI outperform a human being’s prediction of how the market will move. It also helps traders maximize their gains.
- AI provides a two-fold risk prevention measure from market volatility and anticipates future investment risk.
- Most AI-based systems have a risk management system in place that helps you lower the portfolio risk. They have the capability to send alerts if any stock in your portfolio has a red flag.
AI stock management definitely has an edge over retail investors and fund managers. It outperforms them as it provides investors with greater accessibility to a more diverse stock portfolio, faster response times, and lower fees.
To see the magic yourself, you can download the Jarvis Invest and start your equity investment using the power of artificial intelligence.