The availability of data, the computing power to analyze data, along with the ability to run analytics using languages like Python, R, or platforms like IBM’s Watson Analytics have changed the way asset allocation or investment decisions can be made. Instead of relying on theories and approximations, you can analyze actual data and explore and prove out relationships between various factors. You can use analytics and optimization algorithms to get results faster. You can build models that learn and get better with time.

Data does not have to only be numbers or facts related to the market. It could also be your own decisions, and what drove those decisions. Instead of writing them in a notebook, and then relying on your ability to recall when the next crisis arrives, what if those notes were shareable, what if you could run those decisions across multiple environments, and create a template for investing that can be used across your business, across your portfolio?

The key takeaway from innovation in the field of data is not that models are going to take over investment management, but rather a more pragmatic one – investing is littered with various adages and folklores that we assume to be true, and we end up making decisions without verifying or proving the underlying theory or framework behind the folklore. With data and data analytics, we have the ability to validate or repudiate certain beliefs that we hold true, and strengthen our investment process, make it more systematic, and quantify the complex process of intuition that some investment managers call their “edge”.

And for those looking for an edge using data, there is a whole new set of initiatives that could make announcements such as the non farms payroll report pretty much redundant. For example, Spaceknow uses satellite images to predict economic activity.

Disclaimer: All views expressed in this article are that of the author and do not necessarily reflect the views of his employer or any of its affiliates. The author may be associated as an investor or as an advisor with certain companies mentioned in this article.