For the past several years, artificial intelligence — or AI — has increasingly found a place in many walks of life. Almost certainly, you use some form of AI, whether it’s your time on social media, your use of mobile banking, the navigation system you rely on for directions, or another AI-driven application. AI has also become a significant part of the financial services industry. So, you might wonder if AI can help you become a better investor.

Essentially, AI is the ability of a computer program or machine to think or learn. Using algorithms, computers and machines can mimic many of the thought processes of human beings. But how can you use AI to invest? And should you?

In the financial services world, many companies use AI to select investments for specific funds. On an individual level, you can work with an AI-powered “robo-advisor” to build an investment portfolio. These robo-advisors are typically affordable and generally follow proven investment principles, such as diversification, in making recommendations.

Yet, you are more than just the sum of your answers to a robo-advisor’s online questionnaire. Investing is a highly personal matter, which means that, in the following areas, you may well benefit from some human intelligence:

Understanding of your risk tolerance — A robo-advisor will ask you to identify your tolerance for risk — low, medium, high — and will plug in your answers when constructing a portfolio. But only someone who truly knows you, your personality, your family situation and your hopes for the future can know how your sensitivity to risk might cause you to react to events such as sudden market declines.

Answers to qualitative questions — A robo-advisor can provide you with key data points such as rates of return and projections of future accumulations. But so can a personal financial advisor, who can also go beyond the numbers to help you answer subjective questions such as “How can I save for college for my children and my own retirement at the same time?” or “What’s the best way to guard my financial independence if I ever need some type of long-term care, such as an extended stay in a nursing home?”

Guidance for the “big picture” — Your investments are connected to other areas of your life, including your taxes and your estate plans. And a financial advisor may be able to connect you to other, appropriate professionals, and work with them to help you put together your “big picture.” That’s not something a typical robo-advisor is equipped to do.

When it comes to investing, a personal touch may never become obsolete.

Julie Falleta Dinkel is a financial advisor for Edward Jones, 1755 Telstar Drive, Suite 202. Contact Julie at 593-8500.

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