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Pioneering AI-driven investing: FINQ's portfolios outshine the market

  • October 26, 2023
  • 5 min read
  • Discover the current struggle of AI in finance, with AI-driven funds underperforming traditional counterparts.
  • See how FINQ is pioneering a unique approach, combining AI-driven investing precision with seasoned investor instincts to outperform the S&P 500.
  • FINQ's secret sauce: a transparent ranking system, data-centric operations, and a range of stock products with exceptional returns, plus its upcoming FINQ FUND DEPOT.

We now live in a world side-by-side with robots, where artificial intelligence (AI) touches everything—from the movies we watch to the healthcare we receive. Platforms like ChatGPT are thriving, and there's a palpable excitement around AI-related investments. Yet, ironically, Wall Street seems to stumble in truly embracing AI-driven investing. Despite its advancements seemingly everywhere else, in finance, AI is like a star athlete who hasn't yet found the right team.

 

Bloomberg’s "Can AI Beat the Market? Wall Street Is Desperate to Try" deeply examines this problem. Here's the situation: firms like the Voleon Group have $5 billion in assets under management dedicated to creating the ultimate AI machine that can teach itself to beat the market, yet tangible success proves elusive. Eurekahedge's data shows AI-driven funds lagging behind their traditional counterparts by 14% over five years. Plexus Investments further adds that only 45% of boutique AI funds outperform their set benchmarks.

 

So, how can we bridge this gap between traditional finance and AI-driven investing? According to FINQ’s CEO, Eldad Tamir,“ By offering FINQ’s novel approach that combines AI's precision with traditional financial expertise.” In addition, while the aforementioned data points reveal a trend of AI-driven funds underperforming, it's worth noting that FINQ's portfolio is outperforming the S&P 500 by over 20% (between August 24, 2022, and October 17, 2023).

 

FINQ's portfolio is outperforming the S&P 500 by over 20% (between August 24, 2022 and October 17, 2023).

The unmet potential of AI in Finance

Even though AI reshapes industries and redefines the norms, the finance sector is in a peculiar spot. Despite the growing buzz and undeniable potential, the union between AI and investing is on a rocky terrain with unfulfilled potential.

Existing challenges

The challenges AI faces in the financial world are immense. For starters, the huge rich encumbers have little incentive, if at all, to make any changes to the very profitable old-fashioned investments.

The sheer volume of data is a double-edged sword. While AI thrives on vast amounts of information, the financial world often drowns in its data deluge, making it challenging for machines to discern meaningful patterns and act accordingly.

Furthermore, traditional financial analysis often adopts a monthly or quarterly approach. This infrequent analysis means that even for companies that have been around for a century, we might have fewer than 2,000 data points, limiting AI's potential application.

And then there's the issue of reliability. Financial markets are erratic, with trends that might be profitable one day and hemorrhage money the next. Despite their computational prowess, machines often falter in these volatile conditions, getting caught off guard by sudden market shifts.

A paradigm shift in Finance: Embracing AI

Yet, the potential of AI's usage in finance is too potent to ignore, and major institutions recognize it. Vanguard, for instance, recently incorporated AI into its quant stock strategies, ensuring they're more adaptive to ever-evolving markets. AQR Capital Management, another prominent player, is leveraging AI to mine textual data insights, refining and enhancing its longstanding strategies.

Robeco is not far behind, diligently integrating machine learning into its innovative "next-gen" strategies. But are they genuinely harnessing its full promise?

FINQ’s response: A novel approach 

Companies are pouring billions upon billions of dollars into crafting portfolios that aim to outperform the market and yet, astonishingly, many falter. It's almost surreal. But here's where the plot thickens: FINQ is not only challenging this narrative but completely transforming it. With not one, not two, but THREE portfolios that outperform the market through distinct investment strategies, they're soaring past expectations by a staggering margin. 

FINQ’s secret sauce

What's their secret sauce? For starters, FINQ has innovatively peeled back the layers of marketing fluff that shroud the financial world. They've introduced a unique, transparent ranking system for all financial products in the market - from the 500 S&P stocks to every American fund. Their approach to data is groundbreaking. Just as Google's brilliance emanates from its data-centric philosophy, FINQ, too, places data at the epicenter of its operations. It's this relentless pursuit of data-driven clarity that propels FINQ's revolutionary steps towards harnessing powerful data and implementing avant-garde AI mechanisms.

Leading the way

But FINQ doesn’t stop there. They're not merely participants in the merger of finance and technology; they're orchestrating it. By masterfully blending AI's capabilities with the wisdom of traditional financial expertise, they've crafted a strategy that makes many time-honored methods seem antiquated. 

Emphasizing data quality and diversity

FINQ doesn't just seek data; it pursues quality and diverse sourcing. Recognizing the value of varied information, the company acquires vast data sets from reliable sources, including seasoned analysts, public sentiment on social media, and fundamental financial metrics. Their stock products stand as a testament to this, processing daily thousands of data points drawn from these resources. The fruits of this intricate process? A suite of stock products that are nothing short of remarkable in their performance between August 24, 2022, and October 17, 2023:

  • FINQFIRST: A curated list of 10 stocks to buy, boasting an impressive return of 30.43%+.
  • FINQLAST: Another set of 10 stocks to short-sell, still outshining many with a return of 24.86%+.
  • FINQEDGE: A broader spectrum with 20 stocks to buy and short-sell, achieving an enviable 30.75%+ return.

 

FINQEDGE: A broader spectrum with 20 stocks to buy and short-sell, achieving an enviable 30.75%+ return.

Moreover, the upcoming FINQ FUND DEPOT will be a pioneering product collating information about every mutual fund and ETF in the US, which is a prime illustration of this commitment to data excellence. This offering allows investors to navigate through thousands of funds, applying intelligent filters to select the ones based on the selected preferences. 

Unveiling true asset value

Financial products often come wrapped in layers of marketing sheen. However, FINQ aims to peel back these layers to discern complex financial offerings' intrinsic value and inherent risks.

FINQ's stock products, namely FINQFIRST, FINQLAST, FINQEDGE, and FINQFULL, stand out with truly exceptional results. These offerings are not just portfolios; they epitomize FINQ's unwavering commitment to fusing cutting-edge technology with deep financial acumen.

Furthermore, once FUND DEPOT is launched, FINQ plans to expand on this expertise. By employing state-of-the-art risk assessment technology, harnessing AI, and analyzing millions of combinations, the aim is to highlight funds that optimally balance risk, reduce costs, and boost performance.

Mitigating market volatility

Every investor knows the sting of market volatility. FINQ’s approach to this universal challenge is anchored in algorithmic strategies designed to maintain reliable objectivity, reducing the impact of market fluctuations. The company's algorithms skillfully blend active and passive strategies, but what sets them apart is their commitment to the continuity of data collection and the ongoing analysis of this data. This ensures that investment outcomes are not only optimized for current market conditions but are also poised to adapt and thrive amidst future market changes.

Vision and roadmap

FINQ combines tech tools and financial know-how to make investing easier and smarter for everyone. They already utilizing the capabilities of AI, to provide clear data-backed financial rankings and insights. Their future offerings will harness the capabilities of its AI engine to deliver investment solutions that are highly individualized and varied.

Eldad Tamir’s vision for FINQ

"Our mission is to make sophisticated investing technology accessible to all," FINQ founder and CEO Eldad Tamir remarks. Eldad's vision resonates deeply within the company. The aspiration is clear: offer tools, once exclusive to financial juggernauts, and ensure that every investor can tap into high-end technologies and algorithms. 

Empowering the modern investor

Beyond mere technology adoption, FINQ is committed to empowering investors. Detailed explanations accompany each portfolio, tracing every stock transaction. Its accompanying blog serves as a repository of insights, featuring thought leadership articles, market updates, and details about FINQ products. Moreover, it offers investing solutions that simplify the investment process.  

On the horizon: FINQ's fresh take on AI and Finance

Taking cues from the Bloomberg article, the financial industry stands at a pivotal juncture, particularly regarding the use of data for AI. While many in the industry struggle with this data challenge, FINQ shines as the solution. Merging age-old financial insights with the latest AI-driven data analytics, FINQ addresses and overcomes the obstacles that others are only beginning to acknowledge.

Eldad Tamir, FINQ's CEO, dreams of a world where top-notch investing tech isn't just for the big players—it's for everyone. And honestly, that's refreshing. As FINQ charts its path forward, it's not just about addressing today's challenges; they're gearing up for what's next. So, keep an eye on FINQ and monitor the game-changing potential.  

Bobby’s introduction to stock options at a hi-tech firm left him intrigued and determined to expand his knowledge in finance. With his newfound passion, he pursued a Master’s in Finance from Harvard University, graduating with a 3.87 GPA and Dean’s List Honors. Since then, he has worked as a strategic communications and investor relations specialist catering to a diverse global client base that includes CEOs, CFOs, CFAs, CPAs, private equity executives, venture capitalists, global investment firms, real estate agencies, logistics companies, marketing agencies, startups, and publications. Bobby’s vast expertise and experience make him highly skilled at ghostwriting and producing content for major publications ranging from Forbes to the South Florida Business Journal. However, his byline has also appeared in LA Weekly, SFGATE, The Salt Lake Tribune, Wall Street Zen, Vision Magazine, Gold IRA Secrets, and Metro Manhattan Commercial Real Estate, among others.