Purpose: The present paper discusses the application of artificial intelligence (AI) and machine learning (ML) to improve investment decision-making and portfolio management (particularly in volatile markets) as it relates to AI-based financial forecasting models, investor experience, and perception.
Motivation: With the increase of complexity and volatility in markets, it is important to learn how AI can affect investment decisions of investors alongside investor behavior. The gap in the literature on this study is considered to be the lack of understanding of how investors perceive the implementation of AI in market uncertainty.
Design/Methodology/Approach: A survey of 390 investors was carried out quantitatively. The direct and indirect effects of the adoption of AI, market volatility, and investor experience on decision-making were analyzed using Structural Equation Modeling (SEM).
Main Findings: The AI and ML models enhance investor perception, making decisions. The more experienced investors believe in AI predictions whereas the market volatility influences investor perception and decision.
Implications/Impact on Managers: The results assist financial organizations to enhance AI adoption which maximizes investor confidence owing to transparency and education.
Novelty/Contribution: This research demonstrates how AI, market volatility, and experience of investors interact, and the importance of investor perception in adopting AI.