Momentum vs Contrarian: For AI, whatever works, whenever it works
Momentum vs Contrarian:
Portfolio managers know the dangers of reactive re-allocation while drowning in news, speculation and emotions. But well-designed AI is beginning to turn the tides, making smart tactical and timely adjustments a practical option for outperformance.
Machine Learning — at least when it’s done right — is starting to make tactical re-allocation more practical: helping portfolio managers enjoy smooth sailing when the wind is at the market’s back, while steering quickly to safety as seas grow rough.
Case-in-point: our AI platform manages several strategies, including our original Global Macro portfolio. From going live in late 2020 until January 2022, it gladly sailed with the market’s tailwinds.
But as Russia invaded Ukraine while the Fed warned of inflation, the platform quickly — and correctly — turned contrarian: