ChatGPT: Beating Fund Managers in Stock-Picking with AI technology
ChatGPT, an AI-powered chatbot, has been able to select stocks better than some of the UK’s leading investment funds. An experiment conducted by financial comparison site finder.com showed that between March 6th and April 28th, a dummy portfolio of 38 stocks selected by ChatGPT gained 4.9% while 10 popular investment funds averaged a loss of 0.8%. ChatGPT achieved this by selecting companies with a low level of debt and a track record of growth, including Microsoft, Netflix, and Walmart. Despite major funds utilizing AI for years to support their investment decisions, ChatGPT has made AI technology available to the general public and has the potential to guide the decisions of retail investors.
A recent survey of 2,000 UK adults by Finder showed that 8% had already used ChatGPT for financial advice, while 19% said they would consider doing so. However, 35% said they would not consider using the chatbot to help them make decisions about their money. Jon Ostler, Finder's CEO, says that "fund managers may be starting to look nervously over their shoulders," yet he warns that it is too early for investors to trust AI with their finances. Ostler advises that the "safe and recommended" approach for individual investors is to conduct their research or speak to a qualified financial advisor.
Studies have shown that ChatGPT could predict the stock price movements of specific companies more accurately than some basic analysis models, making it a powerful tool for investors. However, concerns have been raised about the technology that its potential uses from writing high school essays to dispensing medical guidance could provide misleading information and allow students to cheat on exams and oust real people from their jobs.
Despite these concerns, Ostler states that the democratization of AI seems to be something that will disrupt and revolutionize financial industries. However, investors need to be careful and cautious when utilizing AI technology for their finances.
