From Investment Research to Investment Intelligence
By Dor Eligula, BridgeWise Chief Business Officer
In the investment universe, in the very near future, the smart money will be on intelligence. While it’s true that research allows you to know all kinds of things about the markets, it doesn’t provide a clear path to action. Investment intelligence empowers investors with both the information that you need to win in the competition over profits, and more importantly, a guide for making the right decisions.
Why Isn’t Research Enough?
Traditional investment research has made many millionaires. By digging through mountains of financial statement items, ETF analyses, ratios, and multiples, individuals and firms the world over have built effective formulas and discovered great opportunities for profitable investments. Financial market research is a solid tool that has served skilled investors well over the years. But all of this is about to change.
Enter Intelligence
Although standard research methods will not disappear anytime soon, the groundbreaking potential of investment intelligence is giving forward-thinkers a major advantage. Investment intelligence allows people to gain knowledge from multiple sources in many new ways, and then highlight the top opportunities.
In a sense, it’s not unlike our understanding of intelligence from military or political contexts. You can have armies with equal levels of skill and lots of information about each other. But the side that knows how to use that information more effectively will have the edge. There is no black and white when it comes to winning; you have to know more than your opponent to win the battle.
Investment Intelligence and Capital Markets
The same truth applies when it comes to investment intelligence. Unlike research, which is heavy, intelligence is light and quick; it involves sifting through thousands of pages of financial data and condensing it into a manageable set of profitable choices. But it also goes a critical step beyond that by guiding your investment decisions.
What Defines Investment Intelligence?
We can think of investment intelligence as financial knowledge that is filtered and multidimensional, allowing it to be enhanced and viewable from multiple angles that create new opportunities.
Customizable Categorization
How you display, process, and interact with information is a major component of intelligence. Whereas research on its own gives you data, intelligence repackages, restates, and re-analyzes that data in virtually any way that you can imagine. In this sense, it allows you to make more of the data that you already have.
Agile Dimensions
Not everything that is relevant to investing can be found in a 10-K. Companies and markets are also about current events, economic trends, and even a CEO’s Twitter (“X”) messages. Investment intelligence draws upon a range of alternative information types and gives you the ability to understand more deeply the financial, operational, and reputational angles of companies, indexes, and markets–which ultimately translates into smarter investments.
Predictive Ability
One of the most exciting aspects of investment intelligence is that it can look at past events to foretell likely future outcomes. In the financial world, this means examining the historical performance of an asset while tying in various contributing factors and extrapolating a forecast. The best investment intelligence technologies will identify and recommend moves before the rest of the market catches on. It can even deliver insights based on patterns, such as better returns in specific categories of stocks over others, or whether investment performance is statistically better at certain hours of the day.
Personalization
Timing is essential for a profitable venture; investment intelligence takes this idea one step further by alerting you when data that is relevant to your strategy emerges. Investment intelligence understands your preferences and your portfolio, as well as what types of information you need to know about, and exactly when you need to know it.
How Crucial Is AI for Investment Intelligence?
Investment intelligence is an approach that can be taken by humans using traditional analysis tools. But AI, especially AI in finance contexts, is a force multiplier that makes investment intelligence more attainable and effective. The ability of AI to scan and analyze financial data across the globe, and then detect patterns that enable personalization and prediction, turns AI into a supercharger that is taking a larger role and replacing older, traditional ways of researching investments.
The reality is that every industry is turning to AI as the go-to in practically every future technology–to dramatic effect. In this industry, those players in the capital markets who don’t get ahead with AI will ultimately be left behind.
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