Search for “AI investing” online, and you’ll be flooded with endless offers to let artificial intelligence manage your money.
I recently spent half an hour finding out what so-called AI “trading bots” could apparently do with my investments.
Many prominently suggest that they can give me lucrative returns. Yet as every reputable financial firm warns – your capital may be at risk.
Or putting it more simply – you could lose your money – whether it is a human or a computer that is making stock market decisions on your behalf.
Yet such has been the hype about the ability of AI over the past few years, that almost one in three investors would be happy to let a trading bot make all the decisions for them, according to one 2023 survey in the US.
John Allan says investors should be more cautious about using AI. He is head of innovation and operations for the UK’s Investment Association, the trade body for UK investment managers.
“Investment is something that’s very serious, it affects people and their long-term life objectives,” he says. “So being swayed by the latest craze might not be sensible.
“I think at the very least, we need to wait until AI has proved itself over the very long term, before we can judge its effectiveness. And in the meantime, there will be a significant role for human investment professionals still to play.”
