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I Tried Asking ChatGPT to Help Me Invest So You Don't Have to | The Motley Fool

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Artificial intelligence (AI) is changing how people work, read, shop, and do just about anything else. Companies have been using AI models for years for all sorts of functions, such as predictions on seasonal shopping demands and inventory management. 

ChatGPT has captured a lot of attention for its use of generative AI models to create work that mimics human capabilities. You can use it to write essays and articles or create artwork, and you can ask it for information on almost any topic. How reliable is it as a tool for helping you invest? I did some research for you. Here's how it went.

A broad outlook

ChatGPT has some pretty sound general advice for investing. When I asked it how to invest, it told me to develop an individual plan based on unique financial goals, personal risk tolerance, and a time horizon. It also reminds people that it's not a substitute for professional investing guidance. 

Then it goes through nine specific steps for successful investing, which in addition to the factors above, include creating a diversified portfolio, educating yourself about different financial instruments, researching, monitoring, and staying informed.

It's not a bad overview of developing an investment strategy, but it's not anything more than that, either. It could be suitable as an introductory guide.

It's certainly not enough to go on to actually get started with real money, because it doesn't help investors figure out the things it's recommending. How can you figure out your goals? What defines a good company to invest in? And so on.

Not too helpful with the specifics 

Next, I decided to see if asking specific questions could help me make more-informed decisions. I asked if I should invest in Amazon, and it was reluctant to help me out, telling me that it couldn't provide investment advice.

It did have an impressive handle on Amazon's business parts, explaining what it does and the kinds of factors that could affect its performance. It also noted potential challenges, such as "changes in consumer behavior, regulatory issues, increased competition, or economic downturns." Again, though, it was fairly broad.

Image source: Getty Images.

Then I asked when I might expect a recession, and I liked its answer. It gave a well-rounded assortment of factors to investigate that could help shed light on economic trends, such as "GDP growth, employment rates, inflation, consumer spending, and business investment." It also recommended looking at "reports from reputable economic institutions, central banks, and financial experts." 

Something else that ChatGPT does well is provide factual information. Think of the things you often ask on a search tool and don't always get a relevant answer for. It can be frustrating because search tools like Alphabet's Google so often can't seem to understand what you want.

Alphabet is also investing in AI for many functions, but in the meantime, if you ask ChatGPT a pointed question, it will often provide a proper answer with factual information in a better form than random web pages that come up on an internet search. However, when looking for specific insight, especially about events more recent than 2021, it will be extremely limited.

A worthwhile tool?

ChatGPT could be a useful in helping you think about priorities in developing an investment strategy or factors that impact a specific stock. But everything it offers is very general and of limited value. 

ChatGPT's main function is generative AI, so it's much more useful for creating content or artwork. It's also handy for facts, but not very effective in providing useful insight. For that, you'll want a human being's analysis.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Amazon.com. The Motley Fool has a disclosure policy.

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