The science behind investment algorithms

ASIA'S capital markets over the past couple of years have been nothing short of volatile, but Covid-19 gave the global markets one of the biggest shocks in recent memory. While we have had a year to adapt to the new normal - and we are seeing markets rallying - it will take some time before we see long-term stability. Until then, the rebound environment remains fraught with risks.

Volatility is undeniably part of our new normal, and the current environment has pushed investors to be more careful with preserving the assets they have on hand. For those who seek to actively navigate the still tumultuous landscape, digitally powered asset preservation algorithms can help them manage their portfolios with efficiency and scale unmatched by humans, especially since many are now powered by artificial intelligence (AI).

However, there is only so much that AI-powered algorithms can do. Even when built with best-in-class inputs by experienced investment managers, these robo-advisors remain limited in their predictive capabilities, which is especially vital to help investors make sense of markets when they are still in flux. It is here where the human element remains vital.