ChatGPT’s Stock Picks Beat the S&P 500

ChatGPT, the conversational AI developed by OpenAI, has been making waves in the financial sector. A basket of 38 stocks chosen by ChatGPT has outperformed both the S&P 500 and the top 10 mutual funds in the UK. From March 6 to August 18, the ChatGPT fund of stocks rose by 9.4%, while the S&P 500 was up by 7.9%. The stocks picked by ChatGPT include high-fliers like Nvidia, Microsoft, and Alphabet, all of which have seen significant growth this year.

The financial world is no stranger to the influence of technology, but what happens when artificial intelligence starts outperforming human experts in stock picking? ChatGPT, a conversational AI developed by OpenAI, has recently made headlines by doing just that. This blog post delves into how ChatGPT’s stock picks have not only beaten the S&P 500 but also outperformed the top 10 mutual funds in the UK.

ChatGPT’s Unprecedented Performance

According to a report by financial comparison site Finder.com, a basket of 38 stocks selected by ChatGPT saw a rise of 9.4% from March 6 to August 18. In comparison, the top 10 mutual funds in the UK saw an increase of only 1.67%. Even the S&P 500, a commonly used benchmark for many funds, lagged behind with a 7.9% increase. The stocks chosen by ChatGPT included industry leaders like Nvidia, Microsoft, and Alphabet, all of which have been performing exceptionally well.

The Criteria for Stock Selection

What’s even more intriguing is the criteria used by ChatGPT for its stock selection. The AI was guided by parameters such as low debt loads, past sustained growth, and assets that offer a competitive advantage. These are the same criteria used by the top 10 mutual funds, making the AI’s performance even more noteworthy.

A Word of Caution

While these results are promising, Finder.com advises against using ChatGPT for financial advice. The AI is trained on data only up to September 2021 and is not designed to offer financial recommendations. According to a 2023 survey, 8% of respondents already use ChatGPT for financial advice, and 19% said they would consider doing so. However, 35% said they would not use ChatGPT as their financial advisor.

Questions to Ponder

1. Is AI the Future of Financial Advisory? — With ChatGPT outperforming human experts, should we start considering AI as a viable option for financial advice?

2. Ethical Considerations — Is it ethical to use AI for financial decisions, given that they are not designed to offer financial advice?

3. Human vs. Machine — Will AI ever replace human financial advisors, or will it serve as a tool to aid human decision-making?