ChatGPT Can make investment decisions and pick stocks better than your fund manager ? Here's the answer


A basket of stocks chosen by ChatGPT, a chatbot powered by artificial intelligence (AI), outperformed some of the most popular investment funds in the UK

Between March 6 and April 28, a fictional portfolio of 38 stocks rose by 49% while 10 leading investment funds recorded an average loss of 08% according to an experiment conducted by the financial comparison site findercom.

It won’t be long before large numbers of consumers try to use ChatGPT to make financial gains, said Finder CEO Jon Ostler in a statement earlier this week

During the same eight-week period, the S&P 500 index, which tracks the most valuable 500 companies in the United States, rose by 3% In Europe, the Stoxx Europe 600 index rose by 05% in that time

A typical investment fund collects money from several investors and is overseen by a fund manager who decides how to invest that money

Finder analysts took the top 10 funds in the UK on the trading platform Interactive Investor as a benchmark to evaluate the performance of the financial funds created by ChatGPT and managed by HSBC (HSBC) and Fidelity were among those selected

The analysts asked ChatGPT to choose stocks based on some commonly used criteria including choosing companies with low levels of debt and a track record of growth Microsoft (MSFT), Netflix (NFLX) and Walmart (WMT) were among the companies chosen

While major funds have used artificial intelligence for years to support their investment decisions, ChatGPT has put technology in the hands of ordinary people with the potential to guide retail investors’ decisions

A poll of 2,000 adults in the UK conducted by Finder last week showed that 8% had already used ChatGPT for financial advice while 19% said they would consider doing so.

However, much more than that, 35%, said they would not think about using chatbot to help them make decisions about their money

Ostler said “Fund managers may have started looking nervously over their shoulders”

ChatGPT can predict stock price movements

In a study published in April at the University of Florida, researchers at the University of Florida found that ChatGPT can predict stock price movements for specific companies more accurately than some fundamental analysis models.

Since  Open AI opened access to ChatGPT in December, the chatbot has amazed users with its ability to provide long and sophisticated answers to questions.

Its potential uses - from writing high school essays to distributing medical guidance - raised concerns that the technology could provide misleading information that allows students to cheat on exams and displace real people from their jobs

Ostler from Finder said "The safe and recommended approach for individual investors is to do their own research or talk to a qualified financial adviser. He warned that it was too early for investors to trust artificial intelligence with their financial resources.

However, Ostler said: “It seems that democratizing artificial intelligence is something that would disrupt and revolutionize the financial industries”

ChatGPT is an AI-powered language model developed by OpenAI. It has been trained on a massive amount of text data from the internet and can generate human-like text responses to a given prompt.

ChatGPT can answer questions, converse on a variety of topics, and generate creative writing pieces. It is part of the broader field of artificial intelligence known as natural language processing (NLP), which seeks to teach computers to understand and interpret human language.

ChatGPT is built using a deep learning architecture called the Transformer, which enables it to learn patterns in language and generate text that is coherent and human-like1. 

ChatGPT is a sibling model to InstructGPT, which is trained to follow an instruction in a prompt and provide a detailed response.

ChatGPT was trained using Reinforcement Learning from Human Feedback (RLHF), using the same methods as InstructGPT, but with slight differences in the data collection setup.

ChatGPT is fine-tuned from a model in the GPT-3.5 series, which finished training in early 20221.

what can chatgpt do ?

Generate ideas and brainstorm

ChatGPT can help with generating ideas for various purposes, such as themes for parties, topics for blog posts, or recipe ideas.

Get personalized recommendations

ChatGPT can act as a personal assistant that gives customized suggestions based on the user’s preferences, such as movies, books, or products.

Understand complicated topics.

ChatGPT can provide clear and concise explanations of complex concepts in simple terms, such as machine learning, quantum computing, or artificial intelligence.

Bring in a writing assistant.

ChatGPT can help with writing tasks, such as poems, news articles, emails, or essays. It can generate original content based on the user’s input or provide feedback and suggestions.

summarize the latest research. 

ChatGPT can summarize research papers, web pages, or studies for the user, highlighting the main points and findings.

Get assistance with coding and debugging.

ChatGPT can provide code examples, look up syntax and parameters, or help with troubleshooting by providing solutions to common coding issues or errors.

Translate text.

ChatGPT can translate text into 95 different languages.

Create multiple-choice questions.

ChatGPT can generate multiple-choice questions for various subjects and topics.

Some of the limitations of ChatGPT are:

  • It sometimes writes plausible-sounding but incorrect or nonsensical answers. This is because it does not have a source of truth during training and it may be misled by its own training data.
  • It is sensitive to tweaks to the input phrasing or attempting the same prompt multiple times. This may result in inconsistent or contradictory responses.
  • It is often excessively verbose and overuses certain phrases, such as restating that it’s a language model trained by OpenAI. This may affect the readability and quality of its responses.

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