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According to the Wall Street Journal (non-paywalled version), hedge funds run by quantitative analysts ("quants"), some of whom are utilizing supercomputers, are now dominating stock trading:
In case you didn't know, The Quants Run Wall Street Now, or so says a headline in today's Wall Street Journal. Quant-run hedge funds now control the largest share (27 percent) of stock trading of any investor type, according to the article. That's up from 2010 when quant-based trading was tied with bank trades for the bottom share. Algorithm-based trading is, of course, the 'sine qua non' of hedge funds and has helped lift them to the top of the investing crowd. [...]
Guggenheim Partners LLC built what it calls a "supercomputing cluster" for $1 million at the Lawrence Berkeley National Laboratory in California to help crunch numbers for Guggenheim's quant investment funds, says Marcos Lopez de Prado, a Guggenheim senior managing director. Electricity for the computers costs another $1 million a year.
(Score: 2) by richtopia on Wednesday May 24 2017, @03:52PM
This is the major question in my mind. For the home investor robo-advisors are the closest parallel, and they do minimize one of the few controllable aspects: the management price. I cannot comment on the performance of my Fidelity Go account beyond in the last four months is has performed slightly better than the share of SPY I bought on the same day to track the performance of S&P500. What I want to see is defensive measures taken if we hit a down market: I can easily put money into ETFs which track the stock market (like SPY or QQQ) but I still need to have some rules to sell if we are seeing another major recession. I pay for a robo-advisor because I want to be completely passive.
https://en.wikipedia.org/wiki/Robo-advisor [wikipedia.org]