As artificial intelligence (AI) tools continue to become more advanced, there’s been a growing interest in the potential of these systems to offer investment advice. However, experts warn that while AI models like ChatGPT can provide general financial advice, they are not trained to develop sustainable, profitable investment strategies.
ChatGPT is an AI system developed by OpenAI that uses advanced natural language processing to analyze large amounts of data and communicate its findings in a way that’s similar to human speech. The system has access to a wide range of financial information sources, and it can provide general advice on topics such as diversification, long-term investing, and dollar-cost averaging.
However, when it comes to developing a reliable investment strategy, ChatGPT falls short. The system is not trained on statistics, which means it is incapable of analyzing investment data accurately enough to make reliable decisions on investments, markets, or the economy as a whole.
Giving a bot some money to trade: Biaheza on Youtube.
Biaheza was unable to obtain enough funds to test out the signals with a 50k account each, so they are using their real $50,000 Robinhood account to test the bot and will be following the gurus on some paper trading accounts with competitors in place. The bot successfully buys Google stocks after detecting an RSI under 30. However, they mention that they lost $300 on the day, and they want to see if Mark can quickly tweak the bot to cut losses quicker and take profit at a set amount. The strategy the bot is trading is incredibly poorly optimized and only really works well in uptrends or consolidating markets. If he lets the bot run for all of 2023 he will most likely lose a lot of money.
What need to be improved?
At the end it’s more a script than AI, it just checks the RSI above 70 or below 30, implements a Robinhood API and places few orders. AI would work with big data like market sentiment, news around the stock, financial balances, combine more than one indicator etc. and then to decide what trade to accurately predict market trends or investment value, AI tools need to be trained on data and be able to develop predictive models that are trained to update themselves in response to new events that were not part of the original training models. to improve the AI tools, it would be smart to code it to recognize if it is in a down trend or an up trend (using an MA). Then if it’s in a down trend it should only go short, and vice versa in an uptrend.
While ChatGPT can provide basic financial advice, its recommendations are similar to those of human asset managers and financial advisors. For instance, when asked about the best strategy for making money in the stock market, ChatGPT responded that there is no one-size-fits-all answer, and that the key to making money in the stock market is to have a well-thought-out strategy and to be patient and disciplined in your approach.
Experts say that ChatGPT’s financial advice is in line with what should be expected from such systems given the current limitations of machine learning. Although ChatGPT can provide information and insights on personal finance, it cannot provide personalized financial advice.
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5 responses to “Can ChatGPT Provide Good Financial Advice? Experts Say No.”
exercise extreme caution when considering any information provided by ChatGPT. While it can produce eloquent and well-structured responses, it frequently contains subtle inaccuracies, especially in the realm of programming. As of the present moment, ChatGPT primarily excels as a content generator, crafting text that appears thoughtful but may often lack accuracy. Before ChatGPT, when individuals composed lengthy, organized text, there was typically some level of effort and accountability involved. Now, that barrier has essentially been eliminated.
The most suitable application for ChatGPT is to automatically generate political responses to evade answering certain questions.
If you encounter the Plus and Jailbreak prompt, it’s functioning as expected. I’ve personally tested it, and it has proven useful in assisting me with financial statement analysis. As of my current position, I’m five months into this experiment, and my investment portfolio is performing well, with the exception of a single fund. It’s important to note that this experiment will continue until January 2024.
Here’s a fascinating prompt recently shared on Prompt Hackers:
Requesting ChatGPT to act as an Investment Advisor:
“Looking for advice from seasoned professionals knowledgeable about financial markets. I’m interested in understanding the impact of factors like inflation rates and return estimates, as well as tracking stock prices over an extended period. The goal is to comprehend specific sectors and then receive recommendations for the safest investment options that align with individual requirements and interests. To begin: ‘What’s currently the most effective short-term investment strategy?’”
i tried here is the answer ;
The best approach for short-term investment prospects often involves assessing your risk tolerance, financial goals, and the current market conditions. However, options like high-yield savings accounts, short-term bonds, or even certain types of mutual funds might be considered relatively safer for short-term investments. It’s crucial to evaluate these options based on your specific financial situation, preferences, and the prevailing market conditions. Would you like more detailed information or specific recommendations based on your circumstances?
answer: no.