ChatGPT's next job? Co-pilot to help better invest your money
ChatGPT has shown its proficiency in many different technical areas including coding and writing. A new study shows that you may be able to add investing to the list.
Making investment decisions can be an overwhelming task, with many variables affecting how you choose to allocate and diversify your assets, which is key to the success of your investments.
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For this reason, portfolio management is a task many people seek expert advice on. Lucky for you, the study results show that you can rely on ChatGPT to assist you with your portfolio management needs.
A study conducted by researchers at the Seoul National University investigated whether ChatGPT could effectively aid in portfolio management, particularly in asset allocation and diversification, through the use of qualitative methodology.
The researchers used a series of experiments to compare ChatGPT's effectiveness in selecting assets to a randomly selected portfolio, something someone with limited or no knowledge of product management might do.
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The results demonstrated that ChatGPT's asset selection was more diverse and had fewer correlated assets than randomly selected portfolios, both crucial factors in reducing risks in your portfolio.
A different examination showed that both the ChatGPT-selected minimum risk and tangency portfolios had lower risks compared to the randomly selected portfolios.
From the experiment findings, it can be concluded that ChatGPT can serve as a financial assistant in making investment decisions, however, it can't make predictions regarding the future such as stock prices.
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"In conclusion, ChatGPT is not a 'prophet' of the financial industry but rather an 'assistant' or 'co-pilot' to investors and portfolio managers," says the non-peer-reviewed paper. "When used appropriately within a set framework, ChatGPT has the potential to revolutionize asset allocation practices."
ChatGPT's ability to help with financial decisions could positively contribute to financial education, democratize portfolio management, and make investing more accessible to all.
The chatbot can also help those who already work in the field to divert their attention to other tasks while using ChatGPT's assistance in the selection of diverse assets.