Building an Investment Portfolio with ChatGPT's Assistance

The AI revolution has arrived. ChatGPT, an AI language model developed by OpenAI and launched in Nov 2022, has taken the world by storm. Its powerful language processing capabilities has revolutionised the way people interact with technology and transformed the way we work and live. From writing emails, handling enquiries, brainstorming ideas to making court decisions, the use of ChatGPT is making our job easier and boost our productivity at work.

ChatGPT could also potentially be a valuable tool for investors looking to construct an investment portfolio according to an investor's preferences and risk profile. In this blog post, I will delve into how ChatGPT can be utilised for this purpose.

To begin, I will inform ChatGPT of my investment preferences and risk tolerance, and specify the evaluation criteria for the portfolio. Specifically, my goal is to create a dividend-generating portfolio entirely composed of ETFs. Additionally, I would like a performance analysis of the recommended portfolio in comparison to a 2-Fund portfolio containing 60% S&P500 and 40% long term treasury bonds.

In mere seconds, ChatGPT produced a list of appropriate ETFs - a task that could have taken me at least 30 minutes of googling search. Not only did it suggest a portfolio allocation as instructed, but it also offered a brief explanation for the allocation decision.

Following that, ChatGPT conducted a performance analysis of its recommended portfolio versus the 2-Fund portfolio. To my delight, ChatGPT even generated a comparison table, which greatly simplified the comparison process.

As we can see, the dividend portfolio outperformed the 2-Fund portfolio in terms of annualised return and dividend yield, although the 3% dividend yield seems a tat too low. Let's see if we can ask ChatGPT to construct another portfolio with higher dividend yield but with similar or lower max drawdown.

Remarkably, ChatGPT proposed a second dividend portfolio that features a higher dividend yield and lower max drawdown, albeit with a lower annualised return.


Overall, I am thoroughly impressed by the capabilities of ChatGPT. However, it is important to note that you should not immediately dismiss your financial advisor, particularly if you are not an experienced investor as you still need to be able to assess the quality of ChatGPT's recommendations. Nonetheless, I believe that employing ChatGPT alongside a human advisor will likely become the standard in the near future.

P.S. ChatGPT revised this entire blog post to enhance its readability and clarity.

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