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Creating Wealth With Machine Learning Intelligence

23 December 20225 mins read by Angel One
Creating Wealth With Machine Learning Intelligence
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When part-time investor, Milind Narayan, heard of his friend’s success in equities, he could not resist himself. He invested a tidy sum in December 2015 and found his investment up by 5% in a month. Things changed quite rapidly after the US hiked the Fed rates and markets crashed worldwide. Nifty and the Sensex too fell sharply and by mid-February Milind was sitting on (-11%) negative returns. He panicked and decided to book losses and exit fully. Today, when he looks back, these stocks would have been up by 34%.

If this story sounds familiar; it actually is. As investors, it is quite easy to be driven by fear and greed. You tend to buy in a hurry at market peaks and tend to sell in panic when markets correct. Can this issue be addressed? The answer could like in machine intelligence.

So, what is machine intelligence all about?

For years, there has been a fundamental difference between the way the human mind operates and the computer operates. While the computer can process mountains of data in microseconds, the human mind finds it hard to simultaneously handle lots of data and process it with speed and precision. On the other hand, humans can assess and evaluate qualitative and subjective factors much better than the best of supercomputers can.

Machine intelligence is about getting computers to think and act more like humans. You use the power of big data, combine it with big processing and use algorithms to actually make the computer think for you. That is what machine intelligence is all about.

But, what is the connection between machine intelligence and investment performance?

It is all about applying the power of big data and the power of algorithms to your investments. Remember, when you are investing in equities or mutual funds there are 5 important choices that you need to make:

  • Is this the right stock / mutual fund to invest?
  • Is this the right investment for my specific goals?
  • Is this the right time to invest?
  • Should I invest in lumps-sum or in a phased manner (SIP)?
  • Am I taking more risk than what my financial goals permit?

Investment in equities is all about answering these five questions. Simple as they appear to be, each of these questions require an in-depth understanding of your financial goals, the best investment products, the ability to compare their relative merits, the need to connect your investments with your goals and getting the right mix of research and intelligence.

Combining the above factors calls for mountains of big data and use of highly sophisticated computer driven models to make smart investment decisions. That is exactly how machine intelligence can help you in making smart and relevant investments.

Why should only FPIs have all the fun?

Large foreign portfolio investors (FPIs) and mutual funds have the benefit of high-end computers to analyze big data and help them make investment decisions. Not surprisingly, many of them outperform the market. If such data and analytics are made available to every small and medium-sized investor in India, most of them can take far more informed and well-thought decisions. Needless to say, it will show on their investment performance! With the help of machine intelligence, investors can first identify their actual investment requirements, and then they can evaluate the alternatives available in the market and then take a decision on what suits their needs the best. In fact, giving the power of machine intelligence to investors in India can go a long way in helping them improve their investment performance substantially.

And, that is exactly what Angel One had done with ARQ

The ARQ platform launched by Angel One is exactly about using machine intelligence. Effectively, it gives every investor the access to use and deploy a wealth management engine for their personal use. The ARQ is not just a software interface to identify your goals or screen stocks. There is a huge back-end machine that is at work. This machine evaluates your needs, helps you articulate and define your goals, opens you up to the world of investment ideas and products, helps you to make an intelligent comparison of choices and finally select an investment mix that fits into your requirements. The ARQ effectively combines the power of analytics with the research pedigree of Angel to create a solution that is tailor-made for you.

The bottom-line is that you no longer need to fret about committing the cardinal investment mistake of buying high and selling low. Thanks to ARQ, every customer can now enjoy the benefits of being a true-blue Wealth Customer.


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