Has Big Data Made Investment Easier for ‘Amateurs’?

big data
Photo by Joshua Sortino on Unsplash

Financial investments have never been an easy prospect. For one, there are a number of risks involved, no matter where you are moving an investment portfolio.

There’s market risk, liquidity risk, interest rates, credit hikes – everything that can happen to the market has happened at one point in time, and some investors were either left happy or left wanting.

That is why, over time, it became known as an expert’s game. In other words, if you were going to make a sizable investment, you either had to have a forgone knowledge of the market or enough money to hire a broker who could effectively balance risk against reward.

In 2023 – also an important year of milestones for ML and AI tech – however, that seems to have changed. Nowadays, big data has given both experts and amateurs a clearer insight into complex data, all of which can be analysed to better understand the market and formulate solutions. As we said,  making financial investments has never been easy. So is it easy now?

The Power Of Big Data

You might be thinking, “It doesn’t matter how big the data is. It will still be complicated to understand and cannot solely be used to persuade decisions.”

And in many ways, you’d be right. But there’s another technology that has entered the investment scene that might change that.

Artificial intelligence has been around for a while, but people are only just starting to understand how crucial it could be in assimilating and translating data.

For instance, FINQrecently published an article on unleashing the power of AI for investment insights: How Data Analysis Enhances Investment Decisions. In this article, they explain how they are using the combined strength of big data and AI to essentially open up the ballpark for future investors.

Not only can AI attain and assimilate big data, but it can then siphon that data into enhanced solutions, and recommendations, and essentially formulate an investor’s strategy for them.

Making Investment Easier

Of course, even with big data, it would be difficult for investors – and even advisors for that matter – to crunch the numbers and identify specific patterns. With AI, however, this can be done for them, and the capabilities for the tech to do so will only get better over time.

The more big data that AI tools are analysing, the more the technology will understand the market, how it swings, trends, patterns, old solutions, new solutions, and even begin to identify movements that haven’t happened yet.

This essentially makes the route into the financial market – as well as navigating it – easier for amateur investors.

You might now be asking: if everyone becomes an expert through big data, what will the financial market look like in another ten or so years? And the truth is, we don’t know. It’s clear that the financial industry is changing, but how far it might go, and what it might mean for future investments, is hard to tell. What is clear though, is that AI has the power to harness big data and make it accessible.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.