The Occupy Wall Street movement is not the first time that economic inequality has appeared in the news. But he drew more attention to differences in the financial system. The Occupy Movement also emphasized how the structure of the system was built for the benefit of those who run it. Although more people occupy 99% or “main streets”, it is still 1% that continue to lead.
Delphia is an investment startup founded in 2018 and wants to change this system. Delphia’s investment model is based on an algorithm that becomes smarter when using data. It hopes to make the stock market serve everyday investors.
Delphia’s goal, CEO Andrew Peek said, is to change the system so that it works for everyone.
The phrase “change the system so that it applies to everyone” may sound too idealistic and too similar to the noble goal that Occupy Wall Street has not fully achieved.corn Delphia bet The combined power of its artificial intelligence-based algorithms and the voluntary participation of frustrated street investors. This investment company hopes to bring stocks back to the market through the concept of quantitative investment and collective data.
Why Delphia is different-changing the system
When most people want to invest, they put their money in a 401(k) mutual fund, money market fund, national debt or CD. But Peek describes the investment world as a simple decision tree. First, potential investors must decide who makes investment decisions—they are also investment managers.
Regardless of the investor’s decision, street investors should trust the data they have or the manager’s decision. Those who act alone depend on an understanding of how the financial and investment markets work. In many cases, this understanding involves the analysis of key performance indicators of stocks (or funds).
The return status of stocks or funds may or may not meet individual investment goals and risk tolerance. Peek believes that investors who are content with average returns should pay as little as possible for the use of index funds to achieve these returns. But investors seeking above-average returns can choose between two investment methods.
Two investment methods
According to Peek, these two styles are basic investment and quantitative investment. Fundamental investment involves in-depth research on a few stocks while using machines to analyze terabytes of data. This data can then be used to establish small positions in hundreds or even thousands of stocks.
Delphia takes the latter approach using an algorithm developed by its CIO (Chief Investment Officer) Jonathan Briggs and research director Emre Konukoglu.
Quantitative investment from mobile apps
Delphia believes that this is the first time retail investors have made quantitative investments through mobile applications. The company offers a portfolio of 200 stocks, but does not charge investors any fees. Instead, he asked everyone to commit to sharing their data to make Delphia’s AI smarter.
The value of the stock market is a function of the speculative behavior of investors and the actual performance of the companies that make up the stock market. Since performance is only announced every three months, big data has entered the speculative side of the equation because investors estimate actual performance.
Consumer access data
Most of the data used to estimate business performance belongs to consumers. It can range from their buying behavior and financial transactions to how people interact with companies on social media. All these data may trigger speculation on the rise or fall of stocks.
However, retail investors do not have access to most data that help determine the value of stocks. They cannot see the source of this information, who controls or sells it, or even how it is used.
Purchase consumer’s personal data
although Increased investment in the stock market On the street, institutional investors still control most of the market. This means that hedge funds invested by these institutions have stronger financial resources and can buy consumer data and use it to their advantage. “Believe it or not,” Pique said, “Delphia’s model was actually inspired by the Cambridge Analytica scandal.
The company’s co-founders recognize the power of personal data, but worry about how the world will arm them against unsuspecting people. Delphia’s investment model was therefore born from the idea of helping people use their personal data for their own benefit, not for the benefit of Wall Street elites.
The co-founders wanted to create a product that would allow people to safely benefit from their data, so they developed an investment strategy to improve consumer data over time.
How you choose to use your data
Those who choose to invest through the Delphia model agree to share their data to help the company’s algorithms make better predictions.
The data comes from social media accounts and consumer credit cards, but investors can choose which information to share. Delphia’s algorithm uses terabytes of data to make investment decisions.
By measuring changes in company sales and other factors, the algorithm can predict the rise or fall of stock values. It is hoped that the data voluntarily provided by Delphi’s own investor base will help the artificial intelligence behind the algorithm to understand the company’s performance earlier before the company’s performance is publicly announced.
Peek said that Delphia’s vision is to use voluntary shared data to increase return on investment, so that more people can achieve financial prosperity.
Future Delphi’s investment strategy
In the past year, Delphi launched the first real quantitative investment strategy. So far, 3,000 people have agreed to provide their data and more than 4,000 investment accounts have been opened.
Currently, the strategy uses commercially available data to achieve its returns. However, as the number of people providing data to Delphia continues to increase, the company will eventually rely on a mix of the data it purchases and the data that its investors freely contribute.
Improve personal returns
As for the near future, Peek is considering contributing to enable Delphia to develop a proprietary data set to further improve people’s feedback. One of the ways the company plans to encourage these data contributions is through its data bonus reward program. The DDRP reward program rewards investors with opportunities to make money every week in exchange for helping Delphia train her artificial intelligence.
If Delphia’s prediction is correct, the investment community will no longer buy Consumption data And the lack of informed consent of consumers.
Delphia boldly predicts on its website that hedge funds and companies will not be able to purchase consumer data without their consent as early as 2024. Instead, American companies will need to contact consumers and make direct requests. Seems familiar? This is exactly what Delphia is already busy doing.
To help you better understand our process-please read our terms of service at https://delphia.com/legal
Image source: икита Семехин; pixels; thank you!