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Can artificial intelligence beat the markets?  Governor May

Can artificial intelligence beat the markets? Governor May

The big question that many investors started asking themselves a few months ago is whether AI can actually perform better than benchmarks and thus take the place of active managers in investment choices, for example.

So every month I will keep a column in this regard, updating you with the results of the Pro Picks strategies, i.e. portfolios (6 in total) with the following characteristics:

  • Rotational approach
  • A basket made up of individual stocks
  • 20 equally weighted titles
  • Updated on the first of every month

For subscribers to InvestingPro These features are already available in the propicks section.

In particular, I will take as a reference the main indicator-based strategy. As we see below, the periodic update took place yesterday and today, and among the first 3 stocks in the new basket, we certainly find companies known to everyone, such as:

  • Nvidia Corporation (NASDAQ:)
  • Ford Motor Company (NYSE:)
  • Super Micro Computer Inc. (NASDAQ:)

To unlock the full list of stocks that make up our May portfolios, you can use the discount code below:

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At the sector level, AI continues to overweight the technology sector (10 out of 20 stocks), while also giving space to healthcare (3 out of 20), industrials (2 out of 20), then energy, financials and discretionary consumption.

So far, with historical data exceeding 10 years, the strategy appears to be performing as expected, with returns above the benchmark and in-line drawdowns (Sortino and Sharpe are at excellent levels).

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So it becomes interesting to be able to look, within a portion of the stocks in the portfolio, at a different and mechanical approach that allows us to reduce the emotional element and the absence of a well-defined strategy as much as possible.

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It is also possible, on the first day of every month when you update the portfolio configuration, to add the list of new securities to your watchlist, so you can monitor them on a daily basis.

So, starting today and continuing through the beginning of each month, I will update you on the evolution of the strategy. I will take the main strategy as a reference, i.e. based on the S&P 500 index, but 5 other types of rotation strategies are also available, in particular:

  • Warren Buffett
  • Tech Titans ()
  • Mid cap
  • value

The question we will try to answer is: Can artificial intelligence be better than human investors? In the meantime, I await your feedback in the comments

Until next time

“This article has been written for information purposes only; it does not constitute a solicitation, offer, advice, advisory or investment recommendation per se, and is not intended to encourage the purchase of assets in any way. I would like to remind you that any type of asset is evaluated from multiple perspectives It is highly risky, therefore every investment decision and associated risks remain the responsibility of the investor.