The growth of AI is a concept that is of interest to more than just those developing and looking to integrate it into their own business. With the growth of interest in this technology, the rising number of companies considering it, and a growing public interest in the concept of AI, this might be the next big thing to invest in. Think big; think Bitcoin December 2017 big. Still, just making a wild presumption that something will grow doesn’t give you the sense of assurance that you need. Instead, it would be best if you considered learning a thing or two about this form of investment. Here’s what you need to know about investing in AI-based business.
The first thing you need to focus on is transparency when it comes to the investor-developer relationship. This will help you understand the risks involved. A higher risk usually leads to a higher potential return, but there’s also a chance that you will exit this deal with zero gain whatsoever. More often than not, the more ambitious the project sounds, the riskier it is. One thing to look out for is the purpose of the tool in question. If the tool pledges to handle several issues effectively, this is more palpable than a tool pledging to single-handedly finish tasks and revolutionizes the industry.
Another thing you need to keep in mind is the fact that AI is merely a tool or a method. This means that you still have to choose the industry that these AI tools will focus on and specialize in. For instance, you can invest in AI in the automotive industry or the AI in the medical industry. These two fields will give you different investment options and numerous different opportunities to worry about. Having an elaborate knowledge of the industry in question should give you an idea of how high the necessity is for this AI tool.
A perspective of a user
The simplest way to try and make a guess of whether a certain investment will be worth it is to look at it from a regular user’s perspective. For instance, AI automation service desk platforms like Servicely are getting more and more popular by users looking to automate their business processes. So, try role-playing a user looking for such a platform, read a thing or two about service desk platforms, and check if the features seem appealing enough. This is a crude method but an effective one.
Like with any other investment, you need to worry about the stocks’ historical performance in question. Still, there’s more than one way to see the performance of the stock in question. For instance, you can look at the best and worst rolling returns and try to see the discrepancy. You can also look at how various political upsets in the past have affected these stocks’ value. A word of caution, past performance and future performance may be connected, but the correlation is not the same thing as causality.
What is the dividend?
Investing in the safest, most perspective AI tool might sound like a no-brainer, but you’re actually here to make money. So, check what the dividend on a certain stock is. The chances are that your investment, the same as the safe bed, doesn’t yield meaningful returns. But it doesn’t lose money either, right? While this logic is consistent, it’s deeply flawed. With any investment (even the safest one), there’s always a risk of failure. So, investing in a safe stock is not the same as putting money in a savings account. Second, this money might yield a return elsewhere.
A closer look at the industry top-dogs
While investing in Amazon, IBM, and Microsoft stocks may sound like too much for you, what you need to focus on is the fact that their performance affects your AI investment, as well. Keep in mind that when the top-dogs do anything of importance, it sends the ripple effect across the entire business world, especially the industry involved. Therefore, it might be a good idea to start paying closer attention to some of these major AI players and check how it shapes the industry as a whole.
At the end of the day, the success of your AI investment depends on your research, your preparedness, and your ability to understand the nature of the investment. Investing immobilizes your funds, and it ensures that your potential profit is of a similar proportion as the risk you’re exposing yourself to. Also, remember that no matter how safe something may seem, with an investment, there’s always a risk. It’s the research and planning that you put into it that will determine the chance for success.