Do not rely on me or any AI chatbot for stock market advice, says ChatGPT

If you are a new investor and looking for some stock market advice then there are multiple ways to do so. You can undergo a course online, attend some valuable seminar (s), speak to friends who are avid investors and most importantly, approach a Sebi-registered investment advisor. Additionally, one source of information i.e., ChatGPT, where you have started going lately for almost every important detail is not recommended. Say who? Well, chatgpt itself. Sounds strange but true!

In response to a prompt where a user asked whether it is advisable to ask ChatGPT for investment-related advice such as stock market investing, it says “it’s generally wise not to rely solely on ChatGPT—or any AI chatbot—for investment advice, especially for making real-money decisions like stock market investing.”

When the chatbot was prodded further, it admitted that it is better to consult a qualified human expert such as a certified financial advisor, investment analyst, or portfolio manager instead of asking a large language model (LLM) chatbot such as ChatGPT.

While explaining its response, it says that investors should speak to human experts for the following: personalised financial planning, real-time market insights and portfolio management and asset allocation, tax-efficient investing and emotional guidance during volatile markets.

“The advice given by any AI come from the inputs given by some individuals. It is only generic in nature - not specific. A good advice should be more specific to the investors' needs. Investor's requirement could be to know where should s/he invest for, say, one month, ChatGPT or Gemini would -- in such as case -- may give a random advice. For instance, it can say suggest to invest in equity, which does not make sense. So, unless an investor works on the risk, financial goals and objective -- it will be difficult to follow this advice,” says Sridharan S., a Sebi-registered investment advisor and founder of Wealth Ladder Direct.

Chatgpt gives following reasons for not relying on it:

I. No personal financial context: ChatGPT can not assess all of that unless you give all the details. And even after this, it doesn't replace a licensed financial advisor.

II. Lack of real-time market data: ChatGPT doesn’t have live data unless you ask for a search. And even then, it is not a trading platform.

III. Lacking specialised insight: ChatGPT could be good for educational concepts such as exchange traded funds or diversification. But it does not do the real research or predictive modeling which a qualified professional might.

IV. No regulation: AI tools such as ChatGPT are not regulated. You bear all the risk of taking its advice. Financial advisors are typically regulated by Sebi, and therefore, they are held accountable.

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