Money Expert Graham Stephan: How You Can Use ChatGPT To Make Millions
Money expert Graham Stephan previously explored the claims that people are using ChatGPT to make millions of dollars. Is it possible? He detailed one avenue where AI has recently outperformed human professionals: investing in the stock market.
Check Out: 10 Valuable Stocks That Could Be the Next Apple or Amazon
Read Next: 6 Genius Things All Wealthy People Do With Their Money
He showed viewers three ways ChatGPT can help — and pointed out some of the shortcomings of using artificial intelligence for investing.
Asking ChatGPT for Top Stock Picks Based on Specific Parameters
One group in the United Kingdom asked ChatGPT to create a portfolio of stocks from high-quality businesses, with criteria taken from 10 leading funds. Between March 6 and April 28 of 2023, Stephan said, the portfolio of 38 stocks gained 4.9%, while 10 leading investment funds lost an average of 0.8%, according to Finder.com.
However, Stephan pointed out, “Fund managers aren’t exactly the crème de la crème to be competing against.” In past examples, monkeys and cats were shown to pick stocks that outperformed investment funds (though outliers don’t always disprove the rule).
In a project called The ChatGPT Challenge, however, the AI platform selected 20 stocks — including blue chip names like Berkshire Hathaway, Google, Amazon, and Apple — and tracked their performance. “On the first day, it was already beating the S&P 500,” Stephan told viewers. “It’s too early to tell how this is going to pan out.”
Learn More: I’m a Self-Made Millionaire — 5 Stocks You Shouldn’t Sell
Using ChatGPT To Choose Stocks To Short
In another experiment, someone created a ChatGPT prompt to analyze news reports for negative, positive and neutral sentiments surrounding top companies. “What it found was that ChatGPT was actually good at predicting what stock prices were actually going to fall the most,” Stephan said.
Negative articles yielded the largest immediate downward movement in stock prices. This information provided a selection of stocks that you could short, or bet against, for potential profit.
Shorting stocks carries substantial market risk, however, and is mostly a tactic used by institutional investors, according to GOBankingRates.
Using AI-Powered Investment Platforms
If you aren’t ready to rely on an AI model to build your portfolio, you can consider using an AI-powered investment platform like Magnifi, which claims to provide personalized, data-driven investment advice. These platforms can take the emotion out of stock picks, which can lead to smarter investment decisions.
However, as Stephan pointed out in the video: “It’s the human factor that makes investing what it is.”
Can You Use ChatGPT To Make Millions on the Stock Market?
Stephan closed the video with a dose of common sense, recommending an S&P 500 index fund for most investors. “It’s boring, unsexy, and basic, but so far it’s worked for those who have held long-term.”
However, ChatGPT does have its place in the world of finance, according to Stephan. “I do believe ChatGPT will be incredibly useful for simplifying information and making it much more digestible for the average investor who doesn’t have time to read earning reports, charts, and graphs,” he said.
Whether that translates to increased profits depends on what you choose to do with that information.
More From GOBankingRates
I'm a Shopping Expert: 9 Items I'd Never Put in My Grocery Cart
This is One of the Best Ways to Boost Your Retirement Savings in 2024
This article originally appeared on GOBankingRates.com: Money Expert Graham Stephan: How You Can Use ChatGPT To Make Millions
