Technology helps investors in making rational, unemotional, and almost ruthless decisions as far as what retail investors should be buying, says Agarrwal of Upside AI.
Wealth creation now has a new name. No, it is not a person or a company but ‘technology’ will make all the difference now, says Kanika Agarrwal of Upside AI in a D-Street Talk podcast with Moneycontrol.
Kanika Agarrwal is the co-founder and CIO of Upside AI, a fintech start-up that aims to revolutionise the investment space with the help of machine learning. The company was founded on the belief that technology will make better decisions than humans over the long term since machines are unbiased and unemotional decision-makers.
Upside AI was ‘The Intelligent Investor’ by Benjamin Graham. The founders believed that the next Warren Buffett would be Artificial Intelligence.
A study highlighted that humans have not beaten the benchmark over a long period of time. The outperformance usually happens during a small period. “Almost 80% of the largecap mutual funds have not beaten the index in the last 5 years,” she said.
Why does it happen? It happens because there is so much of bias and emotion involved in decision-making. Even the best human experts cannot do away with their panic and euphoria.
Technology helps in making rational, unemotional, and almost ruthless decisions as far as what retail investors should be buying, and the second part is when to hold or sell is also taken by technology/machine. This will help in generating long term alpha, explains Agarrwal.
(Tune in to the podcast for more)
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Kshitij Anand is the Editor Markets at Moneycontrol.
