The stock market is constantly changing and adjusting as companies become more, or less profitable and as the public sentiment of these companies changes over time. With the recent advancements in AI technology, the way people are investing is changing too. There is no more waiting around to see how companies will perform in the stock market, instead it is all accessible right in the palm of your hand with your smart-phone. Having the accessibility to check stock trends through AI generated insights, gives power back to the people, retail investors, and their wallets. The use of AI has already started to create generational shifts within the stock market, and could ultimately bridge the financial gap in society.
How AI works
Artificial Intelligence is a technology that uses algorithms to mimic human intelligence. It’s basically creating machines that think and act in ways increasingly imperceptible to us. In fact, you’ve already been interacting with it for years at this point. If you have ever used social media, virtually any website or have been in school in the past several years, you probably used AI to help you learn whether you were aware or not. To finish here, AI can also be combined with other types of technology as a resource to solve problems and eliminate risk, in a variety of applications.
AI impacts financial investments
For example, AI technologies and the platforms that host them such as Prospero.Ai are now paving the way for retail investors to close the gap against the top dogs on Wall Street.
One of the main problems in the stock market is the gap between the top 1% and everyone else. Institutions want to gather data and build technology that helps them dominate the competition. But their reliance on robots and “alternative” data generated by everyday people has opened up new opportunities to give the power back to the people.
One of the ways AI is solving this problem is by educating retail investors on the best ways to maximize reward while minimizing risk. AI technology is now used to generate stock signals and identify patterns to visualize how stocks are doing. Are they high or are they low? This is based on a variety of factors within the market such as the history of stock prices and the financial statements from the companies themselves.
This type of AI technology also conducts market research daily, which gives the most up-to-date trends, mainly through different apps or websites. This means users are not waiting around to make their investment decisions, instead they are already onto the next thing because it is so accessible to them.
AI helps minimize the financial risk of investing when going in uninformed and helps people feel confident about their decisions without waiting around.
AI’s financial impact on generations
As mentioned before, the stock market is changing constantly. The way people select the stocks they wish to buy is not the same, especially because younger generations are now growing up using AI. Gen Z has grown up with this technology, giving them a head start in mastering the newest investing tools because cellphones are practically additional appendages. With a click of a button they can see stock trends and invest. But there is another side to this as bots and bad actors can use a lot of the same methods to manipulate them
Retail investors from the older generations are used to investing in the way they have been for years, and using new AI technology to make investment decisions may not be something they are comfortable with. For example, only 35% of the Baby Boomer generation and 45% of Generation X use an app to do their investing, compared to 60% of Gen Z. The older generations tend to buy stock brokerage trading desks. Not adapting to these changes in technology puts those generations can result in missed opportunities.
Recap of investment AI
Overall, AI gives the average joe a new playing field when it comes to picking investments, and this could ultimately bridge the gap between those in the top 1% and the middle class. The future of the stock market isn’t always clear to the naked eye, but AI technology can help make the future look a little bit clearer. Not only does AI work to take away some of the risk or guessing work when it comes to placing bets on Wall Street, it helps make investing more accessible and easy for everyone to use. The main goal of investing is to help people and retail investors bring more money into their wallets, and AI can make it easier to make sense of mountains of data. This can help make tough decisions faster and leave more time to do the things you love.
AI is constantly transforming, and will continue to adapt just as the stock market does.
Even though the thought of trusting technology may be out of your comfort zone, it does a lot of the work for you 24/7. It is there as a resource, to help set you up for success.
