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Using artificial intelligence (AI) in your investment research can help you gain quick access to important information. But the information AI tools provide isn't always entirely accurate, and some tools may shy away from providing specific guidance.
As a result, it's crucial that you do your own research and, if necessary, enlist the help of a human advisor before you make major decisions when managing your investment portfolio.
Is It a Good Idea to Take Investment Advice From AI?
Artificial intelligence tools like ChatGPT have become increasingly popular, allowing users to write and debug code, break down complex topics, solve math problems and even write poems, papers and more.
With the amount of attention these AI models are getting, it's natural for some to wonder whether such a tool could help when making investment decisions. In particular, ChatGPT may offer some basic information about investing, such as historical data and formulas. But if you ask for specific advice, you'll be disappointed because the service doesn't track real-time financial data.
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One app, Q.ai, uses AI to analyze trends in the market, social media platforms, the news and even Google search trends to manage your investment portfolio and hedge against losses. But this service is automated and doesn't provide direct investment advice you can use on your own.
Pros of Using AI for Investment Advice
- You may be able to easily access important information to use in your investment decision.
- It can help you become a more informed investor.
- Some services can use AI to manage your portfolio for you.
Cons of Using AI for Investment Advice
- It may not be able to track the real-time data necessary to make good investment decisions.
- AI is still in its infancy for this type of use and can provide inaccurate information that shouldn't be used to make investing decisions.
- AI services lack transparency in how they gather the information they provide, so it can be difficult for investors to know whether the advice is sound.
How Is AI Investing Different From Robo-Advisors?
With a robo-advisor, you'll typically provide some basic information about yourself and your risk tolerance to the platform, which will design a portfolio using a computer algorithm based on those details. However, they typically don't use artificial intelligence in their decisions.
They also don't give you much control over which funds your money is invested in or let you invest in individual stocks.
In contrast, an app like Q.ai works similarly to a traditional robo-advisor but also includes artificial intelligence to dig deeper into your individual circumstances and interests, and it gives you more control over where your money gets invested.
If you're using a service like ChatGPT to get investment advice, you're still doing all of the investing on your own; you're just using the advice you get to supplement your own research before making decisions about your portfolio.
Alternatives to AI Investment Advice
It can be tempting to rely on an AI program to provide you with investment advice, but it's important to avoid putting too much stock in the information you receive. Here are some other ways to ensure you're making good investment decisions:
- Read trusted investing blogs and news sources. AI programs like ChatGPT don't track real-time financial data, but you can get the most recent news and recommendations from reputable media sources and analysts.
- Take an online investing course. If you're a novice, consider taking an online course that lays out the basics of investing and can help you get started with your investment portfolio.
- Consult with a financial advisor. Working with a human financial advisor isn't free, but it can help you develop an investment strategy and a portfolio that's tailored to your specific needs, preferences, goals and risk tolerance. What's more, a financial advisor can help you make fewer emotional decisions with your money.
- Use an AI investment platform. Instead of seeking advice from AI, you may consider using a service like Q.ai, which can manage your money on your behalf using artificial intelligence and other tools.
Before you proceed with any of these options, take your time to research each of them and determine which one works best for you, your needs and your goals.
The Bottom Line
AI programs can be powerful tools that you can use to develop your approach to your investment portfolio. However, there are several limitations, so it's important to avoid relying solely on AI to make your financial decisions.
Instead, combine information you find via an AI tool with advice you get from reputable sources to ensure that your data is accurate and helpful. Also, consider working with a financial advisor to develop your strategy and put it into action.