ChatGPT is an immensely powerful tool capable of using natural human language to spit out responses to anything you can think of asking -- or at least that I've thought of yet in my very limited explorations of this artificial intelligence (AI) chatbot, which has gained over 100 million users in just a few months after its rollout.
Things you might ask include questions about investing. ChatGPT quickly provides objective information based on available information and data about trends, industries, and companies. It also can provide observations about risk tolerance, asset allocation, and portfolio diversification; financial goals and timeline; and similar considerations that jibe with best-practices advice from human experts.
Indeed, when it comes to investing, ChatGPT knows a lot. What it doesn't know is you.
Facts are facts -- except when they're intuition
Facts are facts, except when they're not. For instance, history tells us that stocks over the long run outperform bonds and simple savings accounts, that individual stock picks rarely beat index funds, and so on.
That means it's logical to say that if you're (for example) in your 30s, with a young kid or two and a spouse or life partner, you should be comfortable investing in retirement or other accounts and letting those proven facts do their work over decades. That's certainly at the core of the Motley Fool way of investing: buying shares of great companies and holding onto them for the long term.
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How well you understand different investment vehicles, and how deeply you want to go down those rabbit holes, also influence how you put aside your money for the future.
But what that future even should look like -- your aspirations -- remain unique.
Investing is an intensely personal affair. No one's financial journey is exactly the same; each is shaped by our own experiences, cultural biases and predilections, and by our goals and circumstances, which themselves can change as our careers and families evolve.
Understanding our own comfort levels, realizing when our goals have changed, relying on advice from people who are a phone call or email away, and knowing when they have our best interests at heart...these are more subjective matters.
AI chatbots don't have access to your tendencies, emotions, biases, and knowledge levels to guide your investment decisions with specific recommendations. (That's why, for now, they don't try -- at least the times I tried to maneuver one into doing so.)
That's where intuition comes in, underpinning our best efforts at objective investing with whatever feelings of certainty and direction we can muster.
You have to be you, and even chatbots know that
We can expect ChatGPT and its competitors to better tailor feedback to individual investors, as the technology's ability to scrape the internet for information about each of us grows to rival its already impressive ability to distill objective facts and develop a competent narrative.
That will be especially true if chatbots get opt-in access to personal information such as your investment holdings and income and tax status. That would enhance the ability of a chatbot to understand, for instance, your short-term liquidity needs, or how you're doing on saving for goals like buying a home or financing an education.
However, a chatbot cannot assess how important these aspirations feel to you. Your hierarchy of needs will remain your own.
Don't underestimate the ability of this extraordinary new technology to grow as its knowledge base expands exponentially.
But while what ChatGPT doesn't know about you can be expected to shrink, it will never be you. It can't internalize your hopes, dreams, plans, and possibilities. However, it can help inform that internal conversation at levels of sophistication that are only beginning to emerge.
