The Worst Financial Advice ChatGPT Gave Me — and What Experts Say To Do Instead

Core Insights - A 2024 Experian survey indicates that 1 in 3 respondents have utilized generative AI for learning about new topics or finances, with 96% reporting positive experiences, although the accuracy of AI-generated financial advice may be questionable [1] Group 1: AI in Financial Predictions - ChatGPT provided a wide range of potential future values for a $10,000 investment in Nvidia, estimating between $38,000 and $164,000 by 2045, which raised concerns among financial experts regarding the reliability of such predictions [2] - Financial experts emphasize that AI models like ChatGPT cannot access live market data, which is crucial for accurate stock predictions [4][5] - The lack of consideration for market volatility in AI predictions can lead to misleading outcomes, as illustrated by the example of an investment that experiences a 50% drop followed by a 50% rise, resulting in a net loss [6] Group 2: Limitations of AI Financial Advice - ChatGPT fails to account for important factors such as dividend reinvestment, taxes on gains, trading costs, and inflation, which are essential for accurate financial forecasting [7] - Experts recommend a more robust approach to financial predictions that includes scenario analysis based on fundamentals and valuation, as well as Monte Carlo simulations to present a range of outcomes with probabilities [8]