Artificial Intelligence in Investment Management - An Antithesis

We can observe, that the topic “AI in Finance” received massive attention in the financial industry and that many companies already invested significant resources in related projects or are planning to do so.

In some cases the claimed performance results are so outstanding that if true no investor should look anywhere else…unfortunately, in most of the cases these “hypothetical” results do not withstand the test of reality!

In this paper, we challenge the current industry approaches of trying to find patterns in financial markets. Instead, we advocate to use advanced probabilistic methods, which are “per-design” capable of dealing with the noisy nature of these markets.