ChatGPT trades better than financial professionals

A few weeks ago, a US finance professor found that ChatGPT has amazing stock price prediction capabilities. The AI ​​chatbot analyzed tens of thousands of headlines from financial news – and was thus more successful than conventional forecasting models.

Another attempt now shows that ChatGPT is doing better than the professionals from the financial segment when speculating on the stock exchange. The finder.com platform has the AI ​​chatbot instructed, put together an exchange fund from which he expects the highest possible return.

ChatGPT should be based on the principles of successful funds, like the standard writes. The fact that the chatbot is not actually allowed to give any specific tips for investments was overturned for the test.

The AI ​​mainly put tech companies in its portfolio, including Meta, Microsoft and Intel. The three tech companies performed best with increases of 30, 20 and 18 percent, respectively. Other companies in the 38-stock AI fund included Nvidia, Alphabet, Netflix and Visa.

Overall, the fund created by ChatGPT achieved an increase of almost five percent in the eight-week test period from the beginning of March to the end of April 2023. The ten most successful British funds used for comparison, on the other hand, achieved an average minus of 0.78 percent. According to finder.com, the ChatGPT fund was in front on 34 of the 39 trading days.

To put the success into perspective, however, it must be said that the test period of eight weeks is too short to make general statements about the capabilities of the AI. At the same time, the stock indices Dax and S&P 500 show a plus of 2.5 and five percent respectively in the period examined.

Despite short-term setbacks due to potential problems in the banking sector and ongoing interest rate hikes by the Fed and ECB, the months of March and April ultimately turned out to be good stock market months, also because the tech companies were mostly able to come up with good quarterly results.

In any case, it is questionable how well publicly accessible AI tools such as ChatGPT are suitable for investment advice. Not so well, says finder.com’s Jon Ostler. Large funds have been using AI for years – not a good recommendation given the results in the test.

According to Ostler, instead of relying on an AI, you should inform yourself or seek qualified advice. In the future, however, AI could well be suitable for advising on financial issues. Already now, according to Ostler, ChatGPT and Co. are perhaps better than “unqualified Tiktok stars”.