Are RoboInvestors a good tool to augment human decision making?

What does it mean to be a good tool and how does decision making affect outcomes?


A tool by definition is something that helps us complete a given task or activity. The main goal of a tool is to assist in completing a piece of work swiftly, efficiently and and typically with more accuracy. For instance - while any hard object can drive a nail into a wall, a hammer that was designed with that purpose in mind best suits the function. The decision to use the hammer is an option and when faced with a problem at hand. Selecting the right tool and using it in it’s intended manner at the right time can mean a quicker and more effective outcome. Read on to find out how RoboInvestor tools can help you make better decisions.



Author : Richard Goh, CFO Smart Solutions


Advantage of using RoboInvestors


As tasks get more complex and humans have a limited capacity to process in a given time - a good tool can give you an added advantage, especially when it comes to decision making. Tools play a part in eliminating noise from decision making, this could be as simple as emotional influences which can cloud the thinking process. In FinTech, the role of a RoboInvestor is to provide you with additional insights and information to help with decision making and presenting information that would not have been humanly possible in a swift manner. Any investor who does not use any form of external intelligent input is already at a huge disadvantage compared to someone that has access to it.



What are the disadvantages of using RoboInvestors?


RoboInvestors can provide irrational results if not used in the right manner. As with any system that provides any form of artificial intelligence, the outputs are only as good as the inputs and what it was specifically designed and programmed for. A common misconception is to leave all decisions to the RoboInvestor and to believe that it will provide answers and make all decisions. It’s important to understand the limits and conditions of the tool - which brings us back to the point of - selecting the right tool and using it in its intended manner can mean a quicker and more effective outcome. An example of the limitations of a machine learning algorithm and its lack of reasoning capability could be explained in a fruit image sorting algorithm system. Whilst it can sort between the selection of apples, oranges and pears. It will not be able to differentiate an apple that probability have gone bad and smells foul.



How can you leverage the right tools?


Having the right tools can provide positive benefits in making investment decisions

  • it’s used as it’s intended - Portfolio construction , Risk analysis and Recommendation systems

  • understanding its limits - Price Prediction , Bet sizing and Execution


How can we help you at Smart Solutions


Robo-Investors can be beneficial to your investment, while its rationality can be one of its disadvantages if unchecked or not fully considered. At Smart Solutions we can help you make better investment decisions with Robo-Investors’ unique differentiator of incorporating your domain knowledge of the right indicators and models. All results predicted are transparent and thus easily reproducible and accountable. We leverage machine capability at their finest ; to crunch more than 20 years of differentiated data for technical and fundamental analysis. Reach out to us for a demonstration of how our platform can be customised for you and your needs. We promise you it’ll be the best 30 minutes of your time that you’ll spend this week.



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