Artificial intelligence vs traditional market analysis: Can AI improve stock picking decisions?
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Artificial intelligence (AI) is becoming more common in financial markets and is now being used to help investors make investment decisions. This research looks at whether AI can help with stock selection compared with traditional market analysis. The study uses existing research on ChatGPT and Gemini, along with data on the performance of actively managed investment funds. The results show that AI can process financial information quickly, analyze news, identify investment opportunities, and help with portfolio diversification. However, there is still no clear evidence that AI can consistently outperform the market. For example, research on Gemini 1.5 Flash found that it did not consistently outperform an equal-weighted portfolio or the S&P 500. Traditional active investment management also has difficulty beating market benchmarks. Overall, AI appears to be a useful tool for investment analysis, but current evidence does not show that it can fully replace traditional investment analysis.
Keywords
Artificial Intelligence, ChatGPT, Investment Decisions, Portfolio Management, Stock Market, Stock Picking