Using artificial intelligence chatbot ChatGPT to pick stocks has proven to be incredibly effective over recent weeks, with finder.com having conducted an experiment showing it outperforming some of the UK’s leading investment funds.
Analysts from the financial comparison website tested the chatbot by asking it to pick a portfolio of more than 30 stocks based on a range of investing principles used by major funds. The stock selection demonstrated an impressive 4.9% increase over an eight week period compared with an average 0.8% loss of 10 funds on Interactive Investor, including Terry Smith’s Fundsmith Equity and a variety of UK, US, and global funds from Vanguard, Fidelity, and HSBC.
Jon Ostler, the chief executive of finder.com, commented on the results, “It’s not taken the public long to find creative ways of getting ChatGPT to help them in areas where it shouldn’t technically do so”. Recent research further claims that 19% of UK adults stated that they would “consider getting financial advice” from ChatGPT, and an additional 8% also stated that they had already taken financial advice from the chatbot.
At the moment these results should be treated with caution, as Ostler suggests that “the big question is how bad of an idea using ChatGPT for investing research currently would be”. Investors should always spend the time researching via legitimate sources rather than taking advice from a rudimentary AI platform or even TikTok stars.
The increasing prevalence of AI in finance is certainly exciting and likely to revolutionize the industry in the coming years. Natural language understanding is already allowing chatbots to provide tailored financial advice, although it is best to wait until AI has had more time to develop before taking immediate action based on its suggestions.
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