The Rise of AI in Investment Choices

At least one in ten retail investors is now using ChatGPT to choose stocks, sparking a real boom in the robo-advisory market. This is reported by Reuters.

With artificial intelligence, anyone can independently select stocks, monitor their performance, and receive investment analysis that was once only available to large banks or institutional investors.

According to analysts from Research and Markets, the robo-advisory market, encompassing all companies providing automated financial advice, is projected to grow from $61.75 billion in 2024 to $470.91 billion by 2029, representing an increase of approximately 600%.

Investor Leung stated, "I no longer have the luxury of having a Bloomberg terminal or other expensive market data services. Even a simple tool like ChatGPT can accomplish much of the work I used to do."

However, he cautioned that AI might miss critical analysis as it lacks access to paid sources.

A survey by eToro involving 11,000 retail investors worldwide revealed that about half are willing to use AI tools, such as ChatGPT or Google’s Gemini, for selecting or adjusting investments, with 13% already doing so.

In the UK, a study by Finder found that 40% of respondents consulted chatbots and AI for personal finance advice.

ChatGPT also warns that it should not be relied upon as a professional financial advisor. OpenAI does not disclose how many people use the chatbot for investment selection.

Dan Mochulski, head of eToro in the UK, remarked, "AI models can be impressive, but the risk is that people view generalized models like ChatGPT or Gemini as a magic bullet."

Mochulski emphasizes that it is better to use specialized AI platforms that are trained to analyze markets, as general models can make mistakes with numbers and dates, overly relying on past trends and established narratives in attempts to predict the future.