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Consumers trust computers over humans to trade stocks

A new survey of more than 1,000 U.S. investors found that 78% of respondents trust algorithmic stock trading more than human traders.

That confidence rises to 96% if the computer algorithm has a six-year track record of successfully tracking human trading behaviour.

“Making sense of investing can feel like drinking from a firehose,” said Ryan Pannell, Founder and Chief Investment Officer of Kaiju Capital Management. “AI is a game changer for investors because it crunches massive data sets instantly to identify opportunities that no individual manager could predict.”

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While 93% of respondents manage their own investments, using apps like Robinhood and Stockpile to invest in individual stocks and mutual funds, 2 out of 3 respondents said they believe the learning curve for investing is overwhelming.

The largest concern among those surveyed is that 69% were unsure whether an algorithm could accurately predict human trading behaviour. However, 89% of respondents agreed they would be comfortable with a computer algorithm trading for them if it had a successful track record and also was monitored by an experienced hedge fund management team.

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Other survey findings:

  • Of the most popular investment apps, 19% of those surveyed use Robinhood, 16% use Stockpile, and 19% use personal accounts (401K, IRA, Roth, etc.)

  • 83% said they were “familiar” or “knowledgeable” about investing

  • 38% are familiar with ETFs, while 50% are familiar with cryptocurrency

  • 55% have negative feelings about hedge funds

  • 92% were pleased that average investors seemingly outsmarted some traditional Wall Street players in the GameStop stock situation

The survey of 1,000 anonymous U.S. consumers over 18 years old was conducted using Amazon’s Mechanical Turk, the most popular crowdsourcing survey service for scientific purposes.

Photo by Austin Distel on Unsplash

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