Human or artificial intelligence investing: Who wins?
Like most of her peers, account executive Sandra Lim, 28, prefers activities with a personal touch, such as meeting friends.
But when it comes to investing her hard-earned salary, she lets algorithms do the heavy lifting.
She does her own research for short-term plays such as trading Contracts for Difference – a financial derivative product which is valued on the price movements of underlying assets such as stocks, commodities and currencies.
But for long-term investments, such as exchange-traded funds (ETFs) and bonds, she lets robo-adviser platforms – such as Syfe and StashAway – choose her investments.
These are digital platforms that provide automated, algorithmic investment services with minimal human supervision, and typically follow a standardised approach based on an investor’s risk tolerance, investment goals, and other factors.
Ms Lim, who started her investing journey in 2019, chose these platforms based on word of mouth and her own research. Her risk appetite, she shares, ranges between conservative to moderately aggressive.
“My return expectations are between 6 and 12 per cent – a higher return from riskier and short-term investments, and lower returns from longer-term investments,” she says.
“But I don’t track the level of returns specifically. (I’m happy) as long as I’m getting some form of returns.”
With that, Ms Lim does not see the need to work with a human financial adviser – for now.
The UOB 2023 Asean Consumer Sentiment Survey (ACSS) reveals that her approach is fast catching on: Investors in Thailand and Vietnam are increasingly using robo-advisory platforms, and about three in four in the Asean region have used digital trading and wealth management platforms to invest.
Conducted in June, the ACSS surveyed 3,400 interviewees aged 18 to 65, in five countries – Singapore, Indonesia, Malaysia, Thailand and Vietnam.
Mr Abel Lim, head of wealth management advisory and strategy at UOB, notes the popularity of robo-advisers among younger investors but stresses that the trust and convenience that come with a human wealth management adviser “is essential”, especially when investors become more affluent, have more commitments, less time to monitor their investments and need personalised wealth solutions.
Which works better: Man or Machine?
For sure, fund managers have used computer-simulated models to identify investing themes, market factors and signals to structure investment strategies, says Mr Carl Chay, head of advice at boutique wealth management firm GYC Financial Advisory.
“But pure artificial intelligence (AI)-investing models are more autonomous,” says Mr Chay, 44. “It takes the initial investment strategies, which may be formed by humans, and adapts it to changing market conditions, with far less human supervision and intervention.”
According to Statista, a global data and business intelligence platform, the number of robo-advisory investors in Singapore is expected to grow from 648,500 this year to over 830,000 by 2027.
Like most of her peers, account executive Sandra Lim, 28, prefers activities with a personal touch, such as meeting friends.
But when it comes to investing her hard-earned salary, she lets algorithms do the heavy lifting.
She does her own research for short-term plays such as trading Contracts for Difference – a financial derivative product which is valued on the price movements of underlying assets such as stocks, commodities and currencies.
But for long-term investments, such as exchange-traded funds (ETFs) and bonds, she lets robo-adviser platforms – such as Syfe and StashAway – choose her investments.
These are digital platforms that provide automated, algorithmic investment services with minimal human supervision, and typically follow a standardised approach based on an investor’s risk tolerance, investment goals, and other factors.
Ms Lim, who started her investing journey in 2019, chose these platforms based on word of mouth and her own research. Her risk appetite, she shares, ranges between conservative to moderately aggressive.
“My return expectations are between 6 and 12 per cent – a higher return from riskier and short-term investments, and lower returns from longer-term investments,” she says.
“But I don’t track the level of returns specifically. (I’m happy) as long as I’m getting some form of returns.”
With that, Ms Lim does not see the need to work with a human financial adviser – for now.
The UOB 2023 Asean Consumer Sentiment Survey (ACSS) reveals that her approach is fast catching on: Investors in Thailand and Vietnam are increasingly using robo-advisory platforms, and about three in four in the Asean region have used digital trading and wealth management platforms to invest.
Conducted in June, the ACSS surveyed 3,400 interviewees aged 18 to 65, in five countries – Singapore, Indonesia, Malaysia, Thailand and Vietnam.
Mr Abel Lim, head of wealth management advisory and strategy at UOB, notes the popularity of robo-advisers among younger investors but stresses that the trust and convenience that come with a human wealth management adviser “is essential”, especially when investors become more affluent, have more commitments, less time to monitor their investments and need personalised wealth solutions.
Which works better: Man or Machine?
For sure, fund managers have used computer-simulated models to identify investing themes, market factors and signals to structure investment strategies, says Mr Carl Chay, head of advice at boutique wealth management firm GYC Financial Advisory.
“But pure artificial intelligence (AI)-investing models are more autonomous,” says Mr Chay, 44. “It takes the initial investment strategies, which may be formed by humans, and adapts it to changing market conditions, with far less human supervision and intervention.”
According to Statista, a global data and business intelligence platform, the number of robo-advisory investors in Singapore is expected to grow from 648,500 this year to over 830,000 by 2027.
