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ChatGPT as a Virtual Financial Advisor: Controversial or a good choice?

In 2023, Artificial AI has gained sudden popularity and importance. ChatGPT is one of the most popular AI tools available to public right now. However, can it give credible financial advice?

Artificial intelligence (AI) is currently applied in many facets of finance, from chatbots and virtual assistants to fraud detection and risk management. But what could a ChatGPT-style AI system do for your bank account?

To those who aren’t professionals, AI tools could seem unnecessarily complicated or pricey, but improvements in natural language processing and machine learning could transform ChatGPT and other technologies into virtual personal finance advisors. This would include having a specialist on hand to assist you in interpreting the most recent financial news and statistics.

Making informed investment decisions and obtaining a competitive edge in the markets require keeping up with business news and financial market developments. These tools are already in use by businesses to do “sentiment analysis,” as it is known in the financial industry.

So is ChatGPT for financial advice good or bad?

For the purpose of providing investors with information and forecasts regarding stocks and other assets, financial news and statements are analysed. For instance, Morgan Stanley’s AI algorithms examine a variety of data, such as financial statements, news articles, and social media posts, to spot trends and forecast stock values.

Although academic study into the possibilities of AI tools like ChatGPT has begun, much of it is still in its infancy due to how recent this technology is.

The predictions made by ChatGPT concerning stock market performance based on sentiment analysis of news headlines were put to the test in a recent preprint study, the results of which have not been vetted by other academics.

A headline’s relevance to a company’s stock price is determined by ChatGPT, which also assigns a score. According to this study, there is a strong correlation between ChatGPT’s responses and stock market movements, suggesting some potential to forecast return direction. Investors may also benefit from the use of AI tools to assist them understand monetary policy statements and gain insight into how they might affect the financial markets. Another recent preprint assessed ChatGPT’s capacity to comprehend the potential implications of Federal Reserve pronouncements for the financial markets.

Conclusion:

It is not wrong to use AI to get financial advises, however, one must also study the stock prices and market by themselves to make clear financial decisions.

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