Hortz: What are some ways you have been seeing that advisors and asset managers seem to work best with Holly during a downturn like this?
Aferiat: Advisors, asset managers and traders work best with Holly when they need to navigate volatile markets and active strategies. The minute a market, a strategy, or a portion of a portfolio moves from passive to volatile, there is no better tool anywhere than Holly.
I find it interesting how just a few short months ago passive strategies prevailed, even to the point of a supposed death knell sounding on anyone with the temerity to raise the idea that active strategies might still be meaningful. And just like that, the world changed. When the virus hit, market confidence came under scrutiny as predictability and certainty were out the window. And the role of active strategies became part of the mix once again. With new tools like AI and other technologies, they immediately became most relevant.
Hortz: Did it help human advisors keep focused? Provide immediate direction where human managers might be struggling to find steps?
Aferiat: Absolutely. Again, we do not make the decisions for traders or asset managers. One way to think of this as a pilot who is instrument certified. The pilot can fly by sight, which is really hard in this turbulent weather as there are no visual clues, or you can trust the instruments, which sometimes seem counterintuitive but can more reliably lead to being in the right direction and having a greater chance of a safe landing.
Hortz: Based on what you are seeing on how AI has been performing, especially during this market panic, do you have any recommendations or last thoughts you would like to offer advisors and asset managers about using AI in their investment process?
Aferiat: Well, I have an obvious bias, but this environment of many unknowns—and there will be others—is not one where relying on what has worked in the past will continue to apply, nor is it one where intuition alone can provide meaningful guidance.
What artificial intelligence can help with more than anything else at this point is giving portfolio managers and traders the information they need to make decisions in unchartered waters, to have a modicum of confidence in their decisions, and to each day have risk guardrails in place against strategies that track markets in real time. Another way to put it is this: why wouldn’t a professional avail themselves of a tool that is designed to help in the most challenging market environments?
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