Creator1

Everyone is utilizing Artificial Intelligence in some way, shape, or form in order to streamline their business, generate revenue, or in some way make their lives easier. I decided it was high time I do the same thing! Mostly for shits, giggles, and curiosity, I wanted to see if Chat GPT can outperform the market at large (S&P 500 index or equivalent). It will be interesting to explore firsthand AI’s roles in finance. We will see how that can look today as well as in the future.

One of the most important aspects of interacting with Chat GPT and any LLM is ensuring that your queries are sufficient and clarify exactly what you’re looking for. Here’s the query I used:

‘You are tasked with the goal of attempting to outperform me with your stock picks. I will be investing $1,000 into an S&P 500 index fund or equivalent, without any fees, and any/all dividends reinvested. You will get $1,000 to split between 5 stocks in the stock market (exclude penny stocks, and only use companies in the NASDAQ, DOW JONES, or S&P 500) You can split them however you’d like, as in they don’t have to be equally weighted.

Please base your reasoning on previous performance, things like earnings per share, growth statistics, etc.’

Here was it’s response

Stock	Allocation ($)	Shares Purchased	Percent
Apple (AAPL)	$300	1.2245 shares	30%
Microsoft (MSFT)	$250	0.5844 shares	25%
NVIDIA (NVDA)	$200	1.3387 shares	20%
Procter & Gamble (PG)	$150	0.9342 shares	15%
Amazon (AMZN)	$100	0.4394 shares	10%

As I mentioned earlier I will be putting money into an S&P 500 Index fund or equivalent. I use Fidelity to buy stocks, sign up to get started if you don’t have a brokerage account so you can invest like me! Because I use Fidelity, I will be investing in the Fidelity Zero Large Cap Index Fund FNILX. This is essentially the S&P 500 index without paying to use the name S&P 500 so I don’t have to pay fees.

I will be purchasing both of these using my Roth IRA. This allows any gains to be untaxed. I intend on holding these for at least a year, if not indefinitely.

Predictions and follow up.

Chat GPT’s picks are solid in my opinion and are very similar to the top holdings of FNILX. FNILX’s top holdings are Apple, NVIDIA, Microsoft, and Amazon in that order. That being said, the returns may reflect one another given the FNILX’s heavy weight of those stocks (a combined 23% of the portfolio.) My prediction is that both picks go up, although given Chat GPT’s concentration in a few stocks might outperform FNILX. FNILX has a much lower exposure to Proctor and Gamble at .79% of its portfolio compared to GPT’s 15% exposure to PG.

Ultimately, due to it’s alignment and weight to the FNILX top holdings, the Chat GPT picks will yield a higher return than FNILX unless there is a significant downturn in one of these 5 shares. In which case, if the stock is shared in the top holdings, it will likely affect both negatively, but with a more drastic effect to the GPT’s picks given their weighted nature.

The FNILX is the safer choice from a risk perspective due to diversification, whereas Chat GPT’s restriction to 5 share means it must take on much higher risk profile.

I will be following this up weekly to check on this investment.