Artificial intelligence is all the rage at the moment, with many industries such as education, legal, and communications pondering the implications of computers taking over human duties.
So inevitably some The Motley Fool readers must wonder "Could AI help me rake in bigger investment returns?"
Helpfully, comparison site Finder completed a small experiment recently to answer this question.
The researchers asked Microsoft Corp (NASDAQ: MSFT)'s popular AI engine ChatGPT and Alphabet Inc (NASDAQ: GOOGL)'s equivalent Bard to create a stock portfolio and analysed how they performed over three months versus the top 10 managed funds in Australia.
Let's take a peek at what happened:
And the winner is…
The winner over that short timeframe was Bard.
The AI engine, which created a 19-stock portfolio that consisted mostly of US equities, generated 8.2% returns.
The runners-up were the average of the human investors, the 10 funds, which rose 6.3% over the same period.
ChatGPT came in third, bringing back 4.21% of returns.
Its portfolio included 23 stocks, mostly from the US but also including some ASX shares, and equities from the US and Asia.
It's worth noting that some individual funds beat Bard, but the average of the human investors fell short of their AI rival.
But guess who beat all the competitors…
But the moral of the story may surprise you.
None of our three competitors actually beat the S&P 500 Index (SP: .INX).
Finder investment expert Kylie Purcell pointed out the US index rocketed 9.3% during the same timeframe.
"Ultimately the study shows just how difficult it is to beat the market, whether you're a top fund manager or an AI powered chatbot."
It is just not worth trying to time the market in the short term. It will always teach you a lesson, it seems.
With all the volatility for ASX shares over the past couple of years, interest in stocks is rapidly falling among Australians.
Finder found that, as of August, 6.9 million Australians had direct investments in shares. This is 34% of the adult population in the country.
This participation rate is down from 36% at the same time last year, and the 42% peak in October 2021.
