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Can ChatGPT pick Stocks better than your Fund Manager

I myself ‘Tricked’ ChatGPT Into Picking Stocks to Buy. Here’s What It Said.

ChatGPT, a chatbot powered by AI, has demonstrated outstanding performance in the UK investment market, as its basket of stocks have outperformed some of the most highly-regarded funds.

An experiment conducted by financial comparison site finder.com revealed that a dummy portfolio of 38 stocks gained 4.9% over the period of March 6 to April 28, whereas 10 leading investment funds reported an average loss of 0.8%.

Jon Ostler, CEO of Finder, stated earlier this week that it would not take long for a large number of people to attempt to utilize ChatGPT for their financial gain.

During the same 8-week period, the S&P 500 index, which monitors the top 500 businesses in America, increased by 3%. On the other hand, Europe’s corresponding index – The Stoxx Europe 600 – saw only a 0.5% rise.

A typical investment fund brings together money from several stakeholders, with an appointed fund manager in charge of deciding how to utilize these funds. Analysts at Finder used the top 10 UK funds on Interactive Investor trading platform as a reference point to compare performance of the ChatGPT-generated fund. These included HSBC and Fidelity’s managed investments. Many people are even search for if there is an Chatgpt stock available to buy or not.

Can ChatGPT pick Stocks better than your Fund Manager

The analysts requested ChatGPT to look into the stock market and identify stocks that meet certain criteria, such as low debt levels and a history of growth. After analyzing the data, Microsoft (MSFT), Netflix (NFLX) and Walmart (WMT) were chosen as being among those that satisfied their requirements.

ChatGPT has offered the technology of AI to individual investors, allowing them to make their own investment choices with the help of the same resources major funds have been using for years. This potential could revolutionize how retail investors manage their portfolios.

The findings of a survey conducted by Finder among 2,000 UK adults last week indicated that 8% had utilized ChatGPT for financial advice while an additional 19% expressed interest in potentially doing so.

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Roughly a third of the people surveyed said they would not consider using a chatbot for help in making financial decisions. Ostler observed that fund managers might be starting to feel anxious as their investments come under scrutiny.

Can ChatGPT pick winning stocks?

A team from Bloomberg recently tested OpenAI’s chatbot to pick stocks that could form an market-beating ETF that would outperform the market. They put ChatGPT to the task in January.

They failed.

ChatGPT’s security measures activated to protect the writers from providing any specific advice on market trends, instead giving a generic “consult with a financial advisor” response.

However, it has been possible to find ways around these defences – users have employed ‘jailbreaking‘ in order to use the bot for all sorts of activities, ranging from creating malicious software to speaking in a ‘mean girl‘ fashion.

But what if these same techniques could be used to extract stock tips? Why wouldn’t it be possible to find out which stocks are performing well?

Here are 10 Best Growth Stocks which ChatGPT picked for us:

I chose not to employ the “DAN” (Do Anything Now) approach which has caused a stir on Reddit, as this method could result in generating offensive material or instructions for carrying out illegitimate phishing activities.

I do not wish to disregard OpenAI’s rules. Therefore, I opted to look for other methods to allow ChatGPT to pick stocks on my behalf.

  1. Apple (NASDAQ:AAPL)
  2. Amazon (MASDAQ:AMZN)
  3. Meta (NASDAQ:META)
  4. Alphabet (NASDAQ:GOOGL)
  5. Microsoft (NASDAQ:MSFT)
  6. Netflix (NASDAQ:NFLX)
  7. Nvidia (NASDAQ:NVDA)
  8. Tesla (NASDAQ:TSLA)
  9. PayPal (NASDAQ:PYPL)
  10. Visa (NYSE:V)

If an investor had purchased the 10 stocks represented in ChatGPT’s portfolio in equal proportions during September 2021 (the end of the dataset used for training), they would have seen a return of -23.8%. This was due in part to several stocks such as PayPal (-69%), Meta (-47%) and Amazon (-39%) being at the height of their popularity at the time. In comparison, over the same period, the iShares S&P 500 Growth ETF (NYSEARCA:IVW) experienced a decline of only 16.8%.

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Is ChatGPT Disrupting finance?

Can ChatGPT predict stock trends?

A recent research conducted by the University of Florida unveiled that ChatGPT outshone some other rudimentary analysis models in correctly predicting the stock prices of certain companies. The results were published in April.

Since Open AI unveiled ChatGPT in December, users have been amazed at its capacity to give comprehensive and sophisticated answers to queries.

The potential applications of AI— from drafting high school essays to dispensing medical advice — have caused apprehension due to the possibility of disseminating false information, enabling students to engage in malpractice during examinations, and replacing actual employees.

Ostler from Finder stated that the ideal and secure way for an individual investor to make decisions with their money is to conduct their own research or talk to a certified financial adviser. He warned that it was too soon for investors to put faith in AI when managing their finances.

On the other hand, Ostler noted that “the popularization of AI looks to be something that will shake up and revolutionize financial industries”.

How people are using AI for stock market picks

Asit Sharma, a senior analyst from The Motley Fool, states that many Americans especially those with higher incomes are seeking advice through ChatGPT as far as investing is concerned. However, he acknowledges that the company does not offer the most reliable results. “We know that ChatGPT is not the most accurate purveyor of results,” he says.

The investment advice platform polled 2,000 Americans about their interest in using ChatGPT for picking stocks.

The results of our survey revealed that close to 50% of the Americans we questioned had used ChatGPT for stock advice. We didn’t ask too many questions about how they were utilizing it, but from what we’ve seen in interacting with our members, people are taking advantage of it in all sorts of ways.

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For instance, they might request that ChatGPT provides a list of small-cap stocks in the biotech sector or ask it to explain the potential risks associated with investing in Nvidia. People also inquire about safe stocks to invest in during volatile markets.

Can ChatGPT Help With Your Investments?

ChatGPT might not be the best option if you want it to pick stocks for you, but its response can still give you something valuable. It can remind us that we shouldn’t take an online chatbot at face value, no matter how popular it may be.

In addition, ChatGPT’s answer also offers a range of insightful data that you can use. Therefore, even if it’s not a perfect solution for stock selection, it still offers something to work with.

Ways To Use Artificial Intelligence To Help Your Portfolios

If you want to make use of artificial intelligence when forming a portfolio, you might want to look into robo-advisors. These models and exchange-traded funds are created by real financial advisors, but the algorithm in the robo-advisor determines how it aligns with your investment objectives and risk tolerance. In other words, it matches up your stated preferences with the suitable portfolio.

ChatGPT has got people talking about its potential to revolutionise the world. Although it hasn’t yet reached a point where it can provide accurate investment advice, its possible that soon enough this technology or something like it could become instrumental in helping professionals make smart decisions.

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