In today’s environment of heightened volatility, it may be a good time to consider letting a mathematical algorithm rather than a person guide your investments. Humans are hard-wired with emotions and cognitive biases that can cloud their judgement and prevent them from making optimal decisions. This is often true even for battle hardened, professional investment managers. In this video, I discuss why machines almost always outperform human over the long term, including when it comes to investing.
Recent market volatility has pummelled many investment managers, whose prior outperformance in the good times has morphed into dramatic underperformance now that markets have turned sour. In the following video, Noah Solomon, CIO of Outcome Metric Asset Management, discusses the importance of risk management and how to measure investment manager skill.
Have you heard the statisticians' joke about the person with his feet in the oven and his head in the freezer? On average, he feels pretty good! The joke is a good reminder that your investment decisions should be based not only on averages, but also on the degree to which markets can deviate from these averages. In my latest video, with Outcome VP of Client Engagement Beth Philp, you'll see how relying on historical averages can result in sub-optimal returns and failure to meet your financial goals. At Outcome, our approach to markets is based on artificial intelligence and constructing empirically driven, rules-based models.
Noah Solomon, Chief Investment Officer at Outcome Metric Asset Management, interviews investing legend Larry Hite, a data-driven, systematic trading pioneer.