How are AI tools helping DIY investors?

One of the most discussed topics in the financial market today is artificial intelligence (AI) and its advantages to investors.

Some of you may be aware of the potential of AI, but for most, it is still an advanced technology whose application you may have seen only in sci-fi movies.

AI is part of our lives.

Today, it is not only helping traders and investors but also finds applications in many other areas.

Many experts consider AI to be a game changer for the stock market. It not only helps seasoned investors (and fund houses) but also Do-It-Yourself (DIY) investors.

The need - growing numbers
Before the pandemic (March 2020), the number of DEMAT accounts in India stood at around 4.09 crore. In September 2022, the count has increased to 10 crore.

These numbers are a testament that the number of people participating in the equity market has grown exponentially. The crucial point to raise here is - has financial literacy increased at the same rate in India?

It has definitely increased, but perhaps not at the same pace. Hence, thousands of new traders and investors are entering unknown territory - unprepared.

In any area, the unknown is never good, and when it is related to money, it is riskier. With growing trading accounts, it has become more essential than ever that we introduce technology to investors.

It will help investors make the most of the equity market and not suffer losses. An initial setback is one of the main reasons that most people stop investing after a point.

The problem
Investing is not everyone's cup of tea since most people have nothing to do with the financial market. Investors can learn the art of investing, but they need to time, and stock market learning is a never-ending process.

People have a 9 to 5 job (or business), and also need to give time to their families. In between all this, investing takes a back seat. It is wonderful if you have the understanding to make investment decisions on your own (DIY investors).

However, if you are not doing it effectively, you are doing yourself more harm than good. Most investors realise that they are fooling themselves after a point and then look for alternatives.

They lose the golden years of their investment in the process. Today, investors have access to AI tools to take care of their investing needs.

The first question every investor needs to ask is: Is investing something I am good at? If not, can I learn it on my own and excel at it?

If the answer to these questions is NO, investors must not waste time and explore technology for investing as they use it in other areas of life.

The solution
AI tools are excellent for DIY investors as they take care of everything related to equity investment. Jarvis is also an AI investment-based firm.

The biggest challenge for DIY investors is to pick quality stocks and create a portfolio.

AI tools are so advanced today that they create your personalized equity portfolio in seconds. You don't even have to worry about tracking your portfolio.

These platforms continuously monitor your portfolio and notify you immediately if there are any red flags. AI tools also take care of portfolio rebalancing - so investors don't need to worry about when and how to rebalance.

AI tool is to investing what fire was to the cavemen. Today, investors may not realize its potential, but it is something that will become part of investors' lives eventually. The early adopters will surely benefit for two reasons:

• You cut down your losses in the initial years (most investors lose a large part of their capital in the first three years).

• You start making profits as no time is wasted in learning and you give more time to compounding.

Artificial intelligence tools give investors time to focus on things they like to do. At the same time, they take care of investors' individual financial goals. DIY investors must explore this option if they have not so far.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)