Investors should strategically position their portfolios in 2024 to capitalise on the opportunities offered by AI for certain sectors, says the CEO and founder of one of the world’s largest financial advisory and asset management organizations.
deVere Group’s Nigel Green is speaking out after what has been a pivotal year in the AI space, characterized by major company moves from tech titans, pioneering initiatives, groundbreaking product launches, huge investments and strategic acquisitions.
He says: “AI stands at the forefront of technological innovation, poised to catalyse a profound transformation across industries. The potential for a significant boost in productivity is particularly evident in sectors such as financials, airlines, and healthcare.
“The financial industry is experiencing a paradigm shift with the integration of AI technologies. Machine learning algorithms, natural language processing, and predictive analytics are revolutionising processes, from risk management to customer service.
“AI-driven insights enable financial institutions to make data-driven decisions, enhance fraud detection, and streamline operations. Investors should consider seizing potential opportunities in this sector by looking at investments in fintech companies and financial institutions embracing AI to gain a competitive edge.
He continues: “AI-powered algorithms can analyse vast datasets and execute trades with speed and precision, providing a potential boost to investment returns – as such, investors could consider exposure to funds or companies specializing in algorithmic trading strategies.
“Also, as AI enhances risk assessment by analysing complex patterns and identifying potential threats, investors may find opportunities in companies developing innovative risk management solutions for financial institutions.”
The aviation industry is ripe for AI-driven productivity enhancements, from optimizing flight routes to enhancing customer experience. AI’s potential impact on airlines extends to fuel efficiency, predictive maintenance, and personalised services.
Algorithms can analyse historical data, weather patterns, and other variables to optimize flight routes, reducing fuel consumption and operational costs. In addition, chatbots and virtual assistants powered by AI can streamline customer interactions, providing real-time support and personalized services.
“Savvy investors are likely to explore opportunities in airlines adopting AI for route optimisation; and companies investing in AI-driven customer service solutions may present attractive investment opportunities.”
Moving onto healthcare, AI is becoming a transformative force, contributing to improved diagnostics, personalized treatment plans, and operational efficiencies. As the industry embraces AI-driven innovations, investors can position their portfolios to benefit from the growth potential.
AI algorithms can analyse medical images and data to enhance diagnostic accuracy. It can also accelerate the drug discovery process by studying biological data and identifying potential drug candidates.
“Companies developing AI-powered diagnostic tools and technologies may present investment opportunities in the healthcare sector, and investors may consider pharma companies leveraging AI for drug development.”
The deVere CEO says there are three main reasons why investors should position their portfolios accordingly.
First, innovation potential. “Industries integrating AI are likely to experience unprecedented innovation, creating opportunities for investors to capitalise on the growth of forward-thinking companies at the forefront of technological advancement.
Second, competitive advantage: “Companies embracing AI technologies gain a competitive edge by improving efficiency, reducing costs, and enhancing decision-making processes. Investors positioning their portfolios in such companies could benefit from their ability to outperform industry peers.”
Third long-term growth: “AI’s transformative impact is not a fleeting trend; it represents a long-term paradigm shift. As such, investors with a strategic focus on AI-driven sectors could position their portfolios for sustained growth over the coming years.
Nigel Green concludes: “Artificial Intelligence’s potential to boost productivity in industries like financials, airlines, and healthcare is a compelling narrative for investors.
“By strategically positioning portfolios to capture opportunities in companies at the forefront of AI adoption, investors can align themselves with the transformative forces shaping the future of these industries.”