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#58 AI Investing: The Good and The Bad


AI investing has become increasingly popular in Malaysia and across the world as a way to gain exposure to the stock market with minimal effort. AI investing, or automated investment management, is a form of financial technology that uses artificial intelligence (AI) algorithms to make decisions about where to invest your money. The idea behind it is that by using AI-based models and data analysis, you can get better returns on your investments than traditional methods.


There are several types of AI robot investing currently available in the market. These include:


1. Rule-based AI investing: This type of AI robot investing uses pre-defined rules and algorithms to make investment decisions. The rules and algorithms are based on historical data and market trends, and the AI robot follows these rules to make investment decisions.


2. Machine learning AI investing: This type of AI robot investing uses algorithms that are trained to learn from historical data and market trends to make investment decisions. The AI robot uses the data to identify patterns and trends, and makes investment decisions based on this information.


3. Neural network AI investing: This type of AI robot investing uses algorithms that are designed to mimic the way the human brain works. The AI robot uses these algorithms to process data, identify patterns and trends, and make investment decisions based on this information.


4. Hybrid AI investing: This type of AI robot investing combines the features of multiple types of AI robot investing, such as rule-based, machine learning, and neural network, to make investment decisions. The AI robot uses the data from multiple sources and algorithms to make more accurate and informed investment decisions.


The good news about AI investing is that it can provide investors with access to markets they may not have had before due to limited resources or lack of knowledge. It also takes away some of the emotion from decision making which can lead to more consistent results over time. Additionally, it helps reduce costs associated with actively managing investments as most AI solutions are low cost compared to other investment options such as mutual funds and ETFs.


The Good


There are several advantages of AI robot investing. These include:


Speed and Efficiency

AI robot investing can make investment decisions faster and more efficiently than human investors. The AI robot can process large amounts of data and make investment decisions in real-time, allowing for faster response to market changes and trends.


Accuracy and Precision

AI robot investing can make investment decisions with high accuracy and precision. The AI robot uses algorithms and data analysis to identify patterns and trends, which allows it to make more informed and accurate investment decisions.


Low Cost

AI robot investing can be a cost-effective option for investors. The AI robot can make investment decisions without the need for human intervention, which eliminates the need for salaries and other expenses associated with human investors.


Diversification

AI robot investing allows for greater diversification of investments. The AI robot can invest in a wide range of assets and markets, which can help to reduce risk and maximize returns.


24/7 Operation

AI robot investing can operate 24/7, which allows for continuous monitoring and management of investments. This can be particularly beneficial for investors who are unable to constantly monitor the market or make investment decisions.


The Bad


On the other hand, there are some potential drawbacks when it comes to AI investing. One of these is that while many companies offer this service, there isn’t much transparency into how exactly their algorithms work and what data they use for decision making which could lead investors feeling unsure about their investments choices. Additionally, if something goes wrong with an algorithm then it could lead investors losing out financially if they don’t catch the issue in time or are unable react quickly enough when markets change suddenly. Lastly, since most AI solutions rely heavily on historical data there is always a risk that they may miss out on opportunities in new markets or products due their lack of experience in those areas.


AI Investing in Malaysia


The development of AI robot investing in Malaysia has been increasing in recent years. This growth is driven by factors such as the rise of digitalization and the increasing adoption of technology in the financial sector.


The Malaysian government has also been promoting the development of AI and robotics in the country through initiatives such as the Malaysia Digital Economy Corporation (MDEC), which provides support for companies working in the AI and robotics sector.


In addition, the increasing availability of data and advancements in AI technology have also contributed to the growth of AI robot investing in Malaysia. As a result, more and more investors are turning to AI robot investing platforms to manage their investments and achieve their financial goals.


Some examples of AI robot investing in Malaysia include:


1. StashAway: This AI robot investing platform offers customized portfolios based on the individual investor's goals and risk tolerance. The AI robot uses algorithms and data analysis to make investment decisions and manage portfolios.


2. MYTHEO: This AI robot investing platform offers a range of investment options, including stocks, bonds, and ETFs. The AI robot uses machine learning algorithms to make investment decisions and manage portfolios.


3. MyTheo Wealth: This AI robot investing platform offers a range of investment options, including stocks, bonds, and ETFs. The AI robot uses algorithms and data analysis to make investment decisions and manage portfolios.


4. MyTheo Private: This AI robot investing platform offers customized investment portfolios for high net worth individuals. The AI robot uses algorithms and data analysis to make investment decisions and manage portfolios.


5. MyTheo Islamic: This AI robot investing platform offers Shariah-compliant investment options, including stocks, bonds, and ETFs. The AI robot uses algorithms and data analysis to make investment decisions and manage portfolios.


6. Pentaip: The company offers investment services through its AI robot investing platform, which uses algorithms and data analysis to make investment decisions and manage portfolios.


Overall though, despite its potential drawbacks there are still plenty of advantages for Malaysian investors who decide to try out AI investing for themselves including convenience and potentially higher returns than traditional methods offer. With so many different providers offering different services at various price points, it’s important for individuals to research this option carefully before deciding which one works best for them based on their own individual needs and preferences so that they can maximize their chances of success with this type of investment strategy moving forward into 2023!

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