Thinking Ahead: Artificial Intelligence for Investing

On May 10, 2015, the Wall Street Journal featured an article with a title posing the question, “Does Artificial Intelligence Pose a Threat?”[1] As they highlight almost immediately, this idea extends beyond the realm of science fiction, and it is something we pay close attention to in building efficient and consistent investment processes at Wavelength.

Artificial Intelligence for Investing
The article includes opinions from experts in various industries, fields of research and policy institutions. They touch on a number of interesting topics; however, the field of investment management is largely left out of the conversation.

How can artificial intelligence affect investment management?

We view the computerization of processes as more of an opportunity than a challenge for investment management, and alongside other investment firms such as Bridgewater and Two Sigma, we have allocated substantial resources to apply artificial intelligence to investing. In our case, we see development in this area providing the following key benefits for investors:

  1. Disciplined trade execution
  2. Enhanced analytical capabilities
  3. Lower transaction costs

In general, we see increased efficiency in the way we invest as the overarching benefit, and we continue to look for new ways to apply technology as we seek the best balance of risk and return for our clients over the long-term.
[1] Greenwald, T. (2015, May 10). “Does Artificial Intelligence Pose a Threat,” The Wall Street Journal