Scoring above-average returns on the stock market is notoriously hard — so hard, in fact,
studies show even the most talented investors on Wall Street can't do it reliably.
But their problem might be that they're just human.
A international team of researchers just devised a group of AI algorithms that achieved eye-popping returns in tests using past market data to replicate real-time investing.The AI stock pickers didn't just beat the market. They annihilated it.
One model devised by the researchers returned 73 percent annually from 1992 to 2015 after accounting for transaction costs. That's compared to a real market return of 9 percent annually.
Gains were particularly rich during times of high market turmoil — moments when human investors are often overcome by greed or fear and make emotional decisions.
For example, in 2008, when the global financial meltdown cost many investors their shirts, one of the researchers' AI systems notched a breathtaking 681 percent return in the study.
In 2000, when the tech bubble burst, that AI method returned 545 percent.
"Our quantitative algorithms turned out to be particularly effective at such times of high volatility, when emotions dominate the markets," said the lead author of the study, Dr. Christopher Krauss, chair for Statistics and Econometrics at the School of Business and Economics at Germany's Friedrich-Alexander-Universität Erlangen-Nürnberg. https://www.livescience.com/58364-ai-investors-rack-up-massive-returns-in-stock-market-study.html
