Recently, TipRanks sat down for a discussion with James Mason, Head of Product at trading platform NAGA. Mason spoke with Joe Craven, Head of Enterprise Sales at TipRanks, and Robbie Dayan, Head of Product at TipRanks.
The three agreed that the modern world is plagued by ‘information obesity’ with people bombarded by news and opinions from an ever- increasing range of online and offline sources. That’s true for any aspect of your life, from choosing a new home or television to deciding where to go on holiday or what food to cook for dinner.
It also affects the world of retail investing, but Mason explained how that other modern phenomena, AI, is helping filter out the noise and chatter to help investors make better and more informed decisions than ever before.
Filter Out the Noise
“The problem hasn’t been access to information, it is access to too much information,” said Mason. “Over the last 10 years platforms have evolved to the point where we almost compete on who can deliver the most information to users at any given time. For new and experienced users it is very difficult to digest all that information, understand where it is coming from and determine what does and doesn’t matter.”
However, the advent of AI is now allowing investors to outsource their time-consuming and often bewildering research into stocks, ETFs, crypto or pensions. “AI systems can look at a huge amount of data that no one person could ever possibly hope to comprehend and bring that together into a summary or set of action points for that investor to quickly take action on. That speed of information is crucial,” Mason said. “You find out what data really matters to help you make really good decisions. It is empowering people and levelling the playing field. The information that used to be the preserve of the professionals is now available to the average investor.”
Upskill Investment Knowledge
He added that it also helps investors deepen and upskill their investment knowledge. “At the moment we can do a Google search to read information on product types from a number of platforms and forums. Maybe you follow a YouTube guru but are never quite sure whether they are actually any good! AI can filter out that misinformation and allow you to really understand what investing and trading products might suit you.”
Joe Craven, Head of Enterprise Solutions at TipRanks, agreed: “We are in an age of information obesity, but instead of batteries of analysts in hedge funds and asset managers processing the data themselves for portfolio managers, we now have an AI engine which can replace them. Now, the average person can get access to previously unaccessible information and have a tailor made solution for their investment journey.”
NAGA is currently using a range of AI products including TipRanks’ own Smart Score to help its users research stocks, ETFs or trades. “People are using these tools as part of their research process when making decisions,” he said. “There is no evidence yet that people are relying solely on them but as more of a steer to a more informed decision.”
Future of Retail AI Investing
Robbie Dayan, head of product at TipRanks, believes the next way AI will reshape the retail investor landscape is by expanding from research into action. “Very soon we will see AI executing trades according to an investor’s instruction, reinvesting dividends into your portfolio or automatically rebalancing the portfolio,” he said. “It will be doing part of your work as an investor trader. One day we will say ‘How did we ever live without it?”
Mason said AI innovations are emerging on a daily basis to help the retail investor. “Maybe we will partner with these companies or make something ourselves in-house,” he said. “AI is central to how we are going to evolve over the next year.”
In the future he imagines retail investors being able to access analyses of their past investment history to learn where and when decisions could have been made differently. But he is adamant that human intelligence and control is also needed.
“As we build our tools we will be very conscious that we are building them to compliment a user’s trading strategy. We want to take the burden away from people to elevate their trading personality and style with more tailored experiences. We don’t want to allow AI to determine all of our decisions,” he said. “We need guardrails. We need to keep humans in the loop.”