By Jeffrey A. Newman Esq.
Around late September of this year, IBM and asset management company Vanguard announced that they had completed a joint study about quantum computing applications to optimize your investment portfolios. It revealed that the quantum computers can outperform conventional ways of solving portfolio otpimization problems. The joint study apparently took a common finance problem—portfolio optimization—and recoded it into a quantum problem to see whether the system could generate the same results as a traditional computer.
The team began with a 30-bond portfolio but soon was able to grow that to a portfolio of 109 bonds using quantum computing. In a statement the companies said: Our research applies hybrid quantum-classical algorithms to simulate dynamic markets and optimize portfolios under real-world constraints like liquidity, transaction costs, and regulatory limits.
I probed AI to tell me what advances quantum computing would likely offer to financial investing and here is what it said:
Potential Benefits in Finance
- Enhanced Predictive Modeling: Quantum algorithms, such as Quantum Generative Adversarial Networks (QGANs) and Quantum Long Short-Term Memory (QLSTM) models, can process vast, complex datasets and identify subtle, non-linear patterns and correlations that traditional classical computers might miss. This leads to more accurate market forecasts and a broader consideration of potential market scenarios simultaneously.
- Faster Analysis and Execution: The immense processing speed of future, large-scale quantum computers can accelerate data analysis and transaction speeds dramatically, which is crucial in high-frequency trading where milliseconds can make a difference.
- Superior Risk Management: Quantum algorithms can optimize complex processes like Monte Carlo simulations for risk modeling much faster than classical computers, allowing for more sophisticated and real-time risk assessment and portfolio optimization.
- Solving Intractable Problems: Quantum computers are suited for solving specific, highly complex optimization problems that are out of reach for even the most powerful supercomputers, such as identifying optimal asset allocations in a massive portfolio
I plan on studying this arena and will try interviewing some people workiung in the field. Stay tuned. Jeff
Jeffrey Newman is a whistleblower lawyer, whose law firm represents whistleblowers revealing violations of export controls, tariff evasions, money laundering, healthcare fraud and other kinds of WB cases. The firm represents individuals both in the United States and other countries. Mr. Newman and his firm also represent physicians and other healthcare providers who become whistleblowers in healthcare fraud cases. Whistleblower laws in the U.S. allow individuals anywhere with information about export control violations or tariff fraud to reveal the information under The False Claims act or through the Securities and Exchange Commission’s Whistleblower Program. The Firm’s website is at www.JeffNewmanLaw.com . Attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
