ChatGPT has demonstrated skills in many technical areas, including IT development and resume writing. A new study shows you could add financial investment to those skills.
Making investment decisions can be tricky. Many variables influence how you choose to allocate and diversify your assets, which is key to the success of your investments. This is why portfolio management is a task for which many people seek expert advice. Luckily for you, the study results show that you can rely on ChatGPT to help you manage your portfolio.
It was a South Korean study, conducted by researchers from the University of Seoul, which sought to determine whether ChatGPT could effectively help with portfolio management. And especially the allocation and diversification of assets through the use of a qualitative methodology.
Compare the effectiveness of ChatGPT in asset selection to a randomly selected portfolio
The researchers used a series of experiments to compare the effectiveness of ChatGPT in asset selection to a randomly selected portfolio. A practice that someone with little or no knowledge of product management could do. The results demonstrated that ChatGPT’s asset selection was more diverse and had fewer correlated assets than randomly selected portfolios, two crucial factors for reducing risk in your portfolio.
A different review showed that minimum risk portfolios selected by ChatGPT had lower risks than randomly selected portfolios.
Seoul National University
The results of the experiment lead to the conclusion that ChatGPT can serve as a financial assistant in making investment decisions. But that it cannot make predictions about the future of courses, such as stock prices.
ChatGPT is not a “prophet”, but rather a “helper” or a “copilot”
In conclusion, ChatGPT is not a ‘prophet’ of the financial industry, but rather a ‘helper’ or ‘co-pilot’ for investors and portfolio managers,” the article states. “When used appropriately within a defined framework, ChatGPT has the potential to revolutionize asset allocation practices.”
ChatGPT’s ability to assist in financial decision-making is crucial as it positively contributes to financial education, democratization of portfolio management and accessibility of investing for all. The chatbot can also help those already working in the field to divert their attention to more crucial tasks while using ChatGPT’s assistance in selecting various assets.
Source: “ZDNet.com”