Artificial Intelligence (AI) is getting a lot of buzz. You’ve probably heard of this phenomenon where computer systems are being developed to perform tasks normally requiring human intelligence –like speech recognition, writing and language translation. AI also includes research areas such as computer and data science, statistics and machine learning.
As you might imagine, all the chatter around this innovation has drawn the attention of the stock markets. Big technology companies like NVIDIA and Microsoft have seen their stock values skyrocket. These firms build things like computer mainframes and personal computers (PCs). Other companies help manage how the internet gets to your smartphone.
What that means to your pension fund is that large companies we might invest in are at least discussing how they’ll incorporate AI into how they do business (and how that might even affect the number of people they need on their work forces in the years ahead).
Internally, your TRS investment professionals realize using AI in finance is challenging and still developing. They have carefully begun looking into how to understand the money markets better – to identify patterns of, say, how a company’s profitability figures into future stock returns. Another application is using AI to help understand and predict portfolio risk.
There’s no simple solution regarding how AI could fit into investing at TRS, but it’s clear that the technology represents an opportunity that can’t be ignored.