AI and your money: How reliable is artificial intelligence for investment advice?

In the digital age, artificial intelligence (AI) is no longer limited to tech companies; it's becoming a part of people's everyday financial decisions. Many apps and platforms use AI to provide investment advice, manage portfolios, and analyze market trends to suggest profitable opportunities. In just a few clicks, you can be told which stocks are best to invest in, which mutual funds are performing well, or when it's wise to exit the market. This begs the question: should we base important financial decisions solely on the advice of AI tools? Let's explore the answer.

The Power of Data: AI's Greatest Potential
The greatest strength of AI tools is their data analysis. They combine historical data, market movements, company performance, and global indicators to predict potential trends. While humans rely on limited information, AI can process millions of data points simultaneously.
This provides investors with faster and more accurate recommendations. AI can be particularly useful for short-term trading or building a diversified portfolio.

Low Cost and Easy Access
Many experts say that AI-based investment platforms are often cheaper than traditional financial advisors. Many apps offer portfolio management at very low fees, allowing even small investors to benefit from professional-like strategies.

Can AI Understand Everything?
Experts agree that AI is becoming more powerful, but it is not infallible. Its models are based on old data, and predictions can be inaccurate if a completely new market situation arises. Furthermore, AI cannot fully understand your personal emotions, plans, or unexpected financial needs. Therefore, relying solely on algorithms can be risky.

Emotions vs. Algorithms
Emotions often lead to losses in investing. According to experts, panic selling or greedy overbuying are common among investors. AI can be beneficial here because it is not emotional.

What is the right path to understanding?

Experts believe the best approach is to use AI as a tool. Understand its advice, compare it, and make a decision based on your financial situation. If possible, seek advice from an experienced advisor. After all, the money is yours, and the risk is yours. Technology can be helpful, but it's wise to make the final decision thoughtfully.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.