Portfolio resilience in the age of AI
In today's asset management landscape, artificial intelligence (AI) is increasingly used to forecast market behaviour. While these tools offer undeniable benefits in data processing and pattern recognition, there is a growing danger of overestimating their power in systems that remain fundamentally unpredictable.
As Nobel laureate Daniel Kahneman famously observed, much of the world—especially financial markets—is not just complex, but uncertain. In the later stages of the long-term debt cycle, this uncertainty is amplified by elevated valuations, suppressed volatility, and systemic debt accumulation. These conditions, eerily reminiscent of today, expose the limits of prediction-driven investing.
