Is Stock Forecasting Viable with ChatGPT? Investigating Asset Management With Beginner Traders.

There is a data disparity between institutional traders' stock analysis tools and the rudimentary analysis tools of beginner traders; in recent years, experts have theorized that ChatGPT might help bridge this gap. While some AI advocates note AI’s capabilities over human intelligence and its ability to understand complex financial concepts, critics of AI assert that its lack of humanistic value raises concerns surrounding the reliability of ChatGPT in providing financial advice for an emotionally driven market. This paper examines whether ChatGPT4 can aid in stock selection for beginner stock traders (<1 year of experience) and help them outperform the stock market. The study applied a mixed-methodology analysis using a focus group and mock stock portfolios on MarketWatch, a financial news website with trading simulation features. The results suggested that AI-supported portfolios outperformed non-AI-supported portfolios, which par market baselines from major indexes like SPY and DJI. Additionally, AI-supported participants were more likely to report an increased understanding of the market than non-AI-supported participants, albeit with the risk of inaccuracies in ChatGPT’s advice and technical difficulties of ChatGPT prompting. The study concludes that ChatGPT can serve as a financial assistant and educational tool to empower beginner investors to outperform the market.