The Changing Investment WorldSubmitted by InFocus Financial Advisors, Inc. on February 7th, 2017
The pace of change in the last five years is really incredible. Moving in this financial world has got back to being fun, while quite serious. Here's a quote from BlackRock's 2015 Annual Report on how they see things. "Machine learning" and "...discern what human factors are trying to tell us" are some interesting precursors. By the way, BlackRock manages 4.6 trillion (yes that's a T and an R) in assets. And "alpha" generally means out-performance. The quote: Synthesizing Big Data Second by second, the world is generating massive amounts of data — as much as 2.5 quintillion (2.5 x 1018) bytes every day. IBM estimates that 90% of the data in the world today was created in the last two years. It’s critical to surface and harness the infinite number of insights hidden in that data to generate alpha for our clients. BlackRock investment teams — including our Scientific Active Equity (SAE), Model-Based Fixed Income and Multi-Asset Strategies teams — utilize technology based tools and research methodologies, such as machine learning, natural language processing, scientific data visualization and distributed computing, to produce sustainable alpha. We recently unified our equity platform to better leverage SAE’s insights in fundamental equity strategies. These tools can help to discern what human indicators, such as analysts and employees, are trying to tell us about individual companies, as well as to construct better economic indicators that may offer clues to the outlook for entire industries and countries.