AI

Chapter Webmaster Steve Rawlinson and Chapter Treasurer Tom Jones played with ChatGPT to see what kind of investment advice this instance of AI would provide. The interaction with ChatGPT took place on February 7, 2024.

Steve’s Question

Steve asked the following question:

Give advice for investing in the current stock market

Here is the answer:

As an AI language model, I can provide some general advice for investing in the stock market. However, please note that investing involves risks, and it’s always a good idea to consult with a financial advisor or do thorough research before making any investment decisions. Here are a few tips to consider:

  1. Diversify your portfolio: Spreading your investments across different sectors, industries, and asset classes can help mitigate risks. Diversification can potentially offset losses from certain investments with gains from others.
  2. Set realistic investment goals: Define your financial goals, whether they are short-term or long-term. Establishing clear objectives will help you determine the appropriate investment strategy and risk tolerance.
  3. Do thorough research: Before investing in a particular company or stock, conduct comprehensive research. Analyze the company’s financial health, performance, industry trends, competitive landscape, and any other relevant factors.
  4. Stay updated on market trends: Keep abreast of the latest news and developments in the financial markets. Stay informed about economic indicators, geopolitical events, and any regulatory changes that may impact your investments.
  5. Dollar-cost averaging: Consider employing a strategy called dollar-cost averaging, where you invest a fixed amount of money at regular intervals, regardless of market conditions. This approach can smooth out volatility and potentially lower the average cost per share over time.
  6. Practice disciplined investing: Emotions can play a significant role in investment decisions. It’s important to set a disciplined approach, sticking to your investment strategy rather than making impulsive decisions based on short-term market fluctuations.
  7. Monitor and review your investments: Regularly assess your portfolio’s performance and make adjustments if needed. Keep an eye on any changes in the company’s fundamentals or market conditions that may impact your investments.

Remember, the stock market can be unpredictable, and there are no guarantees when it comes to investing. It’s crucial to make informed decisions based on your own financial situation and risk tolerance.

Steve’s reaction: This commentary carefully avoids specifics and provides general advice which most experts would agree is valid. All investors should follow Items 1, 2, and 6. Investors who actively manage their portfolios should also follow Items 3, 4, and 7. Item 5 is a good idea, but the magic in it is usually overstated.

Tom’s reaction: I guess it’s what one would expect; that is, good general advice but no actionable items.

Tom’s Question

Tom asked the following question:

Considering a timeframe of one year, which sectors of the market would you recommend investing in today, and what would be your top  two or three stock picks in each of those sectors?

Here is the answer:

As an AI language model, I can provide some general insights, but please note that investing in the stock market carries risks and it’s important to do thorough research and consult with a financial advisor before making any investment decisions. Additionally, market conditions and individual company performance can change rapidly. That being said, here are a few sectors and some potential stock picks based on recent trends and market performance:

  1. Technology Sector:
    • Apple Inc. (AAPL): A leading consumer electronics and technology company.
    • Microsoft Corporation (MSFT): Offers a wide range of software, hardware, and cloud services.
    • NVIDIA Corporation (NVDA): Specializes in graphics processing units (GPUs) and AI technology.
  2. Healthcare Sector:
    • Johnson & Johnson (JNJ): A diversified healthcare company with products in pharmaceuticals, medical devices, and consumer health.
    • Pfizer Inc. (PFE): A global biopharmaceutical company known for its vaccines and medicines.
    • UnitedHealth Group Incorporated (UNH): A diversified healthcare services and insurance company.
  3. Renewable Energy Sector:
    • Tesla, Inc. (TSLA): An electric vehicle and clean energy company.
    • First Solar, Inc. (FSLR): Manufacturer of solar panels and provider of solar energy solutions.
    • NextEra Energy, Inc. (NEE): One of the largest renewable energy companies in the world.

Please note that these stock picks are not recommendations, but rather examples based on their prominence and recent market performance. It’s important to conduct thorough research and consider individual financial goals and risk tolerance before making any investment decisions.

Tom’s reaction: A game response by the bot.  Here’s my  two cents, these suggestions are all S&P 500 stocks, large companies not likely to go bankrupt any time soon.  They were probably picked because they are large and prominent companies, in the news all the time.  They likely would show up on searches.

            The bot lucked out with the techs, picking good stocks in AAPL, MSFT, and NVDA, large stocks prominently in the news and doing well.  Its picks go downhill from there.  Of the rest, only UNH would be worth considering today because of its large Medicare Advantage presence.  JNJ has too much talc litigation still pending.  PFE strongly going the wrong way, upper left to lower right, gone down so much it’s now paying a 6 % dividend!  TSLA, FSLR, and NEE are all trending down, might be good companies but not good stocks to buy now.  So, most of these stocks would be of interest only to bottom fishers, which I am not.

            Bottom line for me, I wouldn’t pay this bot to pick my stocks.

Steve’s reaction: The listing of these stocks came with disclaimers, including that they were not recommendations. So, ChatGPT has the wisdom to be very cautious in this area. I agree that JNJ and PFE have problems, and I think the renewable energy sector is currently overrated.

Conclusion

Neither Steve nor Tom made any portfolio changes as a result of reading ChatGPT’s advice.