An AI tried to beat the stock market index. It failed.
The Nordics’ first AI-powered fund versus a basic index fund.
Every investor dreams of beating the index. Experts handpick stocks to add to their portfolio and create expensive hedge funds that attempt to beat the market. However, the truth is that only a fraction of investors manages to beat the index over an extended period of time.
In 2008, Warren Buffet confronted the hedge fund industry. Buffet argued that an index fund could outperform a handpicked portfolio over a period of ten years. Sure enough, Buffet proved to be right. A simple index fund defeated all of the experts’ handpicked funds.
Tony Robbins has written a 660-page book called Money: Master The Game, in which Robbins explained the ins and outs of financial investments while interviewing some of the greatest minds in economics. In it, Robbins mentions that “[t]here are 7,707 different mutual funds in the United States […]. But the statistic is worth repeating: 96% will fail to match or beat the market over any extended period.” (Tony Robbins, Money: Master The Game, 2016, p. 96, ISBN: 978–1–4711–4861–3).
That’s right: 96% of mutual funds in the US fail to beat the index over an extended period.
