Is ChatGPT A Better Financial Advisor? We're Going To Find Out

In the realm of artificial intelligence, OpenAI’s ChatGPT has been making waves with its astounding ability to generate human-like text.

Benzinga decided to put the AI to the test in an entirely new context — investing. Can ChatGPT design a portfolio that outperforms the leading U.S. equity funds? It’s time to find out.

As a starting point, we gave ChatGPT the task of constructing a theoretical $10,000 portfolio based on the 10 most popular U.S. equity funds as of 2021. The goal was to create a diversified portfolio of 40 stocks, with a balance of risk and potential for growth.

Drawing from the likes of the Vanguard 500 Index Fund, Fidelity 500 Index Fund, and others, the AI crafted a portfolio spanning various sectors. Tech, financials, healthcare, consumer discretionary, industrials, consumer staples, energy, and telecommunications.

Its approach? A blend of growth and value strategies, aiming to encapsulate the essence of the leading funds.

In the upcoming series, published each Wednesday, we will be tracking the performance of this AI-crafted portfolio against these top-tier funds. The objective isn’t to promote AI as a financial advisor replacement, but rather to explore its potential in supporting investment decision-making.

Next Wednesday, we’ll reveal which funds we stacked ChatGPT up against.

Read also: Google Prepares To Integrate ChatGPT-Like Feature In Its Ad Business

Remember, while ChatGPT is powerful, it lacks the ability to comprehend real-time data or individual financial situations, and it’s not a licensed financial advisor.

Still, the experiment promises to be a fascinating journey into the capabilities of AI in the financial world. Stay tuned for our next installment, where we’ll report on the first week’s performance.

Here's the stocks it gave us, and we're going to allocate the money according to the percentage allocation to each sector, as outlined below.

Tech sector (25%) $2,500, each stock has a $312.50 allocation
Apple Inc AAPL 1.8 shares
Microsoft Corporation MSFT 1.008 shares
Amazon.com, Inc AMZN 2.84 shares
Alphabet Inc GOOG 1.41 shares GOOGL 1.41 shares
Meta Platforms Inc META 1.34 shares
Nvidia Corp NVDA 1.08 shares
Adobe Inc ADBE 0.91 shares
Salesforce Inc CRM 1.53 shares

Financials (15%) $1,500, each stock has a $300 allocation
JPMorgan Chase & Co JPM 2.21 shares
Bank of America Corp BAC 11.01 shares
Wells Fargo & Co WFC 7.87 shares
Citigroup Inc C 6.54 shares
Goldman Sachs Group Inc GS 0.94 shares

Healthcare (15%) $1,500, each stock has a $300 allocation
Johnson & Johnson JNJ 1.86 shares
Pfizer Inc PFE 7.86 shares
Merck & Co Inc MRK 2.57 shares
UnitedHealth Grup Inc UNH 0.61 shares
AbbVie Inc ABBV 2.06 shares

Consumer Discretionary (15%) $1,500, each stock has a $300 allocation
Tesla Inc TSLA 1.78 shares
Home Depot Inc HD 1.04 shares
McDonald’s Corp MCD 1.01 shares
Nike Inc NKE 2.45 shares
Starbucks Corp SBUX 2.82 shares

Industrials (10%) $1,000, each stock has a $200 allocation
Boeing Co BA 1 share
Caterpillar Inc CAT 0.94 shares
3M Co MMM 2 shares
Honeywell International Inc HON 1.02 shares
Lockheed Martin Corp LMT 0.44 shares

Consumer Staples (10%) $1,000, each stock has a $200 allocation
Procter & Gamble Co PG 1.56 shares
Coca-Cola Co KO 3.17 shares
PepsiCo, Inc PEP 1.03 shares
Walmart Inc WMT 1.61 shares
Costco Wholesale Corp COST 0.4 shares

Energy (5%) $500, each stock has a $250 allocation
Chevron Corp CVX 1.59 shares
Exxon Mobil Corp XOM 2.33 shares

Telecommunications (5%) $500, each stock has a $250 allocation
AT&T Inc T 14.79 shares
Verizon Communications Inc VZ 6.7 shares

Disclaimer: This experiment is purely theoretical and does not constitute financial advice.

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