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- Herausgeber: John Wiley & Sons
- Kategorie: Wissenschaft und neue Technologien
- Sprache: Englisch
Winning strategies for investors looking to boost gains with artificial intelligence
AI is one of the hottest investment trends on Wall Street. AI Investing For Dummies gives you all the must-know details on how artificial intelligence can benefit investors. You’ll learn how powerful AI can be in helping you make better decisions, identify hidden opportunities, and build wealth in stocks, bonds, commodities, and real estate. This easy-to-understand Dummies guide also covers budgeting, taxes, estates, and planning for college and retirement—all with AI-specific tactics that can improve efficiency, mitigate risk, and level up your portfolio’s performance. You’ll also find all the info you need to sift through and implement the right resources and solutions for you.
- Understand the benefits and drawbacks of AI investing
- Debunk the biggest myths about AI investing
- Get an in-depth analysis of the top AI stocks to watch
- Learn how to avoid common pitfalls in AI investing
- Take a peek at the role of AI in shaping the future of finance
This is the ideal Dummies resource for consumers and investors who are new to AI and want to wrap their heads around this emerging technology.
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Seitenzahl: 355
Veröffentlichungsjahr: 2024
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AI Investing For Dummies®
To view this book's Cheat Sheet, simply go to www.dummies.com and search for “AI Investing For Dummies Cheat Sheet” in the Search box.
Table of Contents
Cover
Title Page
Copyright
Introduction
About This Book
Foolish Assumptions
Icons Used in This Book
Beyond the Book
Where to Go from Here
Part 1: Artificial Intelligence Basics
Chapter 1: Artificial Intelligence 101
First Things First: What Is AI?
Distinguishing the Two Types of AI
Investing in Stocks with AI’s Help
Using AI to Try Stock Investing Alternatives
Looking at Your Total Financial Picture with AI
Getting Smart about AI
Chapter 2: A Primer on ChatGPT
Acquainting Yourself with ChatGPT
It’s All About the Prompt
The Limits and Negatives of ChatGPT
Looking at ChatGPT Alternatives
Chapter 3: Spanning the AI Landscape: Different Inputs and Outputs
First Things First: Text-to-Text with Chatbots
Other AI Inputs and Outputs
Finding Even More Tools with a Few Helpful Resources
Part 2: AI Stock Investing
Chapter 4: Large-Cap AI Stocks
Getting a Sense of AI’s Place in the Big Picture
Understanding Market Capitalization Basics
AI Companies: The Major Players
Checking Out the Pros and Cons of AI Stocks for Investors
The Indirect Way to AI Profits: Investing in Impacted Companies
Using AI to Analyze Large-Cap Stocks
Chapter 5: Small-Cap AI Stocks and IPOs
Beginning with the Basics of Small-Cap Stocks
Finding AI-Related Small-Cap Stocks
Choosing Small-Cap AI Stocks
Introducing IPOs
Surveying Safety and Hedging Strategies for Small Caps and IPOs
Chapter 6: Diversifying with ETFs and Mutual Funds
Comparing ETFs and Mutual Funds
Looking at the Pros and Cons of ETFs and Mutual Funds with AI’s Help
Noting Some Top AI-Related ETFs
Researching ETFs with AI
Focusing on AI-Related Mutual Funds
Reviewing Resources for Investing in ETFs and Mutual Funds
Chapter 7: Robo-Advisors
Defining What a Robo-Advisor Does
Debating the Pros and Cons of Robo-Advisors
Digging into Robo-Advisors’ Main Features
The Bottom Line: Choosing a Human Advisor or a Robo-Advisor
Listing a Few Top Robo-Advisors
Chapter 8: Fundamental and Technical Analysis
Fundamental Analysis
Technical Analysis
Part 3: AI Stock Investing Alternatives
Chapter 9: Hard Assets and Commodities
Understanding Investing versus Speculating
Comparing the Risks of Precious Metals and Commodities
Handling Hard Assets (Primarily Precious Metals)
Considering Commodities
Chapter 10: Bonds, Bank Investments, and Digital Currencies
Bonds and Bank Investments
Cryptocurrencies
Central Bank Digital Currencies (CBDCs)
Chapter 11: Real Estate Investing
Knowing Whether You Have What It Takes to Be a Real Estate Investor
Noting Two Major Real Estate Considerations
Getting into Direct Real Estate Investing
Investing Indirectly in Real Estate
Trying Real Estate Investment Trusts
Examining Real Estate ETFs
Checking Out Additional Strategies for AI Real Estate Investing Prompts
Consulting Real Estate Resources
Chapter 12: Business and Career Ventures
Understanding the Benefits of Having Your Own Business
Starting a Business
Running Your Business
Using AI to Boost Your Career
Part 4: Smart Investment Tactics
Chapter 13: Using AI for Economic Analysis
Gross Domestic Product (GDP)
The Labor Market
Income Taxes
Interest Rates
Leading Economic Indicators (LEI)
Inflation
The Federal Reserve
The Political Landscape
Chapter 14: Financial Planning and Other Money Matters
Walking through the Steps of Financial Planning
Getting a Handle on Budgeting
Spotlighting College Expenses
Chapter 15: Retirement and Estate Planning
Digging into Retirement Planning
Thinking about Estate Planning
Chapter 16: Tax Considerations
Reviewing the Tax Treatment of Different Investments
Sharing with the IRS
Looking at Tax Deductions for Investors
Getting Tax Benefits with Retirement Accounts
Checking Out AI Tax Tactics and Strategies
Tapping into Tax Resources
Part 5: The Part of Tens
Chapter 17: Ten Cautions about Artificial Intelligence
Inaccuracy and Errors
Bias
Fraud
Job Displacement
Overreliance on Technology
Information versus Wisdom
Use of the Right AI Tool
Your Input versus AI Output
Faulty Predictions
Privacy
Chapter 18: Ten or So Types of Prompts You Can Use for AI Investing
Simple Questions
Complex Questions
Personal Scenarios with Goals in Mind
Formulas
Lists
Second Opinions
Pros and Cons
Comparisons of Performance
Prompts in Different Languages
Prompts at a Basic Level
Document Analysis
Chapter 19: Ten Tools and Resources That AI Beginners Should Consider
OpenAI.com
Investopedia
ToolsAI.net
YouTube AI Channels
AI Productivity Tools
Bedrock AI
Your Brokerage Site’s Robo-Advisor
Udemy and Other Online Courses
Discord and Other Groups
Chapter 20: Ten Strategies to Complement Your AI Investing Pursuits
Focusing on Fundamentals
Investing in Utilities
Investing in Consumer Staples
Investing in Healthcare
Considering Dividends
Limiting Your Losses
Choosing the Right Savings Bonds
Diversifying with Hard Assets
Personal Preparedness
Keeping a Paper Trail
Part 6: Appendixes
Appendix A: AI Resources
Beginners’ Tutorials and Courses on AI
AI YouTube Channels
Books on AI
AI News and Views
AI E-Zines
AI Resource Compilations
User Groups about AI and ChatGPT
Appendix B: AI Tools
Investing AI Tools
Personal Finance AI Tools
Tax and Budgeting AI Tools
Robo-Advisors
ChatGPT Alternatives
Directories of AI Tools
Other Finance-Specific Tools Using Generative AI
Appendix C: General Investing Resources
General Investing Sites
Specialized Investing Sites
Investing Books
LinkedIn Groups
Investor Clubs and Organizations
Government Agencies
Index
About the Author
Connect with Dummies
End User License Agreement
List of Tables
Chapter 6
TABLE 6-1 AI-Related ETFs
Chapter 16
TABLE 16-1 Short-Term versus Long-Term Capital Gains Tax
TABLE 16-2 Standard Tax Deductions
List of Illustrations
Chapter 1
FIGURE 1-1: Asking AI about AI.
Chapter 2
FIGURE 2-1: An introduction from ChatGPT.
FIGURE 2-2: The first few things ChatGPT can help with.
FIGURE 2-3: More things that ChatGPT can assist with.
FIGURE 2-4: ChatGPT can provide plenty of help.
FIGURE 2-5: Some financial planning and investing prompts.
FIGURE 2-6: Additional financial planning and investing prompts.
Chapter 4
FIGURE 4-1: Top companies in the AI field, according to AI.
FIGURE 4-2: Some industries that may benefit from AI.
FIGURE 4-3: A SWOT analysis courtesy of AI.
Chapter 5
FIGURE 5-1: The pros and cons of small-cap stocks, according to AI.
FIGURE 5-2: Choosing a small-cap AI stock.
Chapter 6
FIGURE 6-1: Summarizing information on an AI-related ETF.
FIGURE 6-2: Asking AI about the largest AI-related ETF.
Chapter 7
FIGURE 7-1: Traits of a robo-advisor according to AI.
FIGURE 7-2: The advantages of robo-advisors.
FIGURE 7-3: The disadvantages of robo-advisors.
Chapter 9
FIGURE 9-1: The risks of buying precious metals, according to AI.
FIGURE 9-2: AI information on futures.
FIGURE 9-3: AI information on futures.
FIGURE 9-4: Differences between commodities and futures.
FIGURE 9-5: You can ask AI about a commodity-related ETF.
Chapter 10
FIGURE 10-1: Different bond ratings according to AI.
FIGURE 10-2: Defining cryptocurrencies.
FIGURE 10-3: Defining CBDCs.
FIGURE 10-4: The benefits of CBDCs according to AI.
FIGURE 10-5: The drawbacks of CBDCs according to AI.
Chapter 11
FIGURE 11-1: Qualities of a successful real estate investor.
FIGURE 11-2: Who shouldn’t be a real estate investor.
FIGURE 11-3: The advantages of direct real estate investing.
FIGURE 11-4: Direct real estate investing’s disadvantages.
Chapter 12
FIGURE 12-1: Ways that AI can help you with your new business.
FIGURE 12-2: A number of ways that AI can help you run a business.
Chapter 13
FIGURE 13-1: Explaining GDP.
FIGURE 13-2: Investments to consider when GDP is rising.
FIGURE 13-3: Investments to consider when GDP is declining.
FIGURE 13-4: Investments for a strong labor market.
FIGURE 13-5: Investments for a weak labor market.
FIGURE 13-6: Investments for rising interest rates.
FIGURE 13-7: Investments for falling interest rates.
FIGURE 13-8: Details about LEI.
FIGURE 13-9: The scoop on the Federal Reserve.
Chapter 14
FIGURE 14-1: Increasing your inflow.
FIGURE 14-2: Decreasing your outflow.
FIGURE 14-3: Alternatives to four-year college degrees.
Chapter 15
FIGURE 15-1: One of several answers from AI on reaching an investment goal.
FIGURE 15-2: AI’s explanation of estate planning.
Chapter 18
FIGURE 18-1: Pros and cons of investment accounts in a table format from ChatGP...
Guide
Cover
Table of Contents
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Copyright
Begin Reading
Index
About the Author
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AI Investing For Dummies®
Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com
Copyright © 2024 by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
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Library of Congress Control Number: 2024930804
ISBN 978-1-394-23703-6 (pbk); ISBN 978-1-394-23704-3 (ebk); ISBN 978-1-394-23705-0 (ebk)
Introduction
Artificial intelligence (AI) has taken the world by storm, and what better umbrella than a For Dummies guide? This book offers friendly and concrete guidance to either the newbie to AI or the intermediate investor, who is also interested in how this dynamic and soon-to-be pervasive topic affects you financially. That may mean investing and wealth-building or related issues ranging from retirement planning to estate planning and college planning. I also cover a wealth of practical resources, strategies, and tools to make sure you’re ahead of the pack.
About This Book
AI investing is generally new to the public, and it can be valuable to anyone managing an investment portfolio or who needs information to achieve financial goals, especially with stocks and stock-related funds. This book is laid out so you can go from “What are AI prompts?” to how to use them and which ones work best in varying investing situations.
The first few chapters of this book go into the basics of AI, including its risks and rewards. Later parts go into the panorama of investing and financial topics that AI can help you with. The book doesn’t just stop at AI stock investing — it goes deeper since AI affects so much in the world of investing, business, and general finance. No matter what your money concern is, this book has what you need to know written in an easy-to-digest and practical way.
Take a close look at the appendixes because this is the secret treasure of this book. Because AI is changing so quickly, you need to know where to look to keep up, and Part 6 is rich in how-to and where-to resources, educational and otherwise.
A quick note: Sidebars (shaded boxes of text) dig into the details of a given topic, but they aren’t crucial to understanding it. Feel free to read them or skip them. You can pass over the text accompanied by the Technical Stuff icon, too. The text marked with this icon gives some interesting but nonessential information about AI investing.
One last thing: Within this book, you may note that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply key in the web address exactly as it’s noted in the text, pretending as though the line break doesn’t exist. If you’re reading this as an e-book, you’ve got it easy — just click the web address to be taken directly to the web page.
Foolish Assumptions
In writing this book, I imagined someone pulling a copy off a bookshelf in their local bookstore and scanning it to see whether it’s a valuable guide. And I wondered what that person would need to know to find this book interesting. Here are some of the assumptions I came up with about you, the reader:
You have an interest in artificial intelligence and how it affects you financially.
You’re a consumer or investor and seeking guidance on how AI can increase your prosperity.
You’re worried about AI and how it affects your job or business, and you want to know what to do and how to proceed in this exciting, yet scary, new area.
You want a convenient source of guidance on resources for the fast-paced world of AI technology.
Icons Used in This Book
In the margins of the book, you’ll find these icons helping you out.
Whenever I provide a hint that makes an aspect of AI investing easier or potentially more successful, I mark it with a Tip icon.
The Remember icon marks paragraphs that contain information that you should absolutely take away from this book.
Heed the paragraphs marked with the Warning icon to avoid potential AI investing disasters.
Whenever I get technically inclined, I mark the paragraph with a Technical Stuff icon. If you’re not into the nitty-gritty technical details of AI investing, you can skip these nuggets of info.
Beyond the Book
In addition to the material in the print or e-book you’re reading right now, this product comes with some access-anywhere goodies on the web. Check out the free Cheat Sheet for info on ways that AI can help you save money and much more. To get this Cheat Sheet, simply go to www.dummies.com and search for “AI Investing For Dummies Cheat Sheet” in the Search box.
Where to Go from Here
This book is designed so that you can quickly jump to a specific chapter or section that most interests you. You don’t have to start with the first chapter — although if you’re new to AI and related investment issues, I recommend that you do so. Understanding the foundation of AI investing helps you better apply the techniques that you discover in the later chapters on the specifics of your investment activity.
You don’t have to read this book from cover to cover, but if you’re an especially thorough person, feel free to do so! If you just want to find specific information and then get back to work, take a look at the table of contents or the index, and then dive into the chapter or section that interests you. Besides investing and financial issues with AI, I especially suggest that you also review the business and career AI-related information so that you keep up with the professional challenges and opportunities that are unfolding with AI right now.
Keep in mind that success in any endeavor is initially reliant on sound information and guidance, and a For Dummies guide is there for you right from the start. AI Investing For Dummies will help you forge ahead successfully on your AI-driven path to a brighter future.
Part 1
Artificial Intelligence Basics
IN THIS PART …
Discover what artificial intelligence is and check out some common AI tools.
Get a primer on ChatGPT, the biggest AI tool out there. Look at its features and uses.
Take stock of the risks and rewards of AI.
Chapter 1
Artificial Intelligence 101
IN THIS CHAPTER
Defining “artificial intelligence”
Exploring the two major types of AI
Knowing how AI can help with your financial pursuits
Artificial intelligence, more commonly known as AI: It’s all the rage today, and it will likely end up in every corner of modern life. It stokes both excitement and fear. It’s changing the business, social, and financial landscape as I write this.
When it comes to AI, the best choice for people is to do what you’re doing right now — learning what it is, what it can do, and how you can use it to your advantage in today’s competitive economy. Like every major innovation in human history, it can have amazing positive power, and it can have the power to harm. Use it to make yourself stronger. This chapter gets you started on the road to investing with AI.
First Things First: What Is AI?
As a business person and a financial educator, I generally avoid in the scope of this singular book the techie stuff and stick to the how-do-I-use-this-stuff approach. I pride myself on being an educator, and I look at artificial intelligence the same way I look at a laptop computer or a smartphone — like a tool. I may not be able to explain the inner workings of it with much precision, but I know how to use it to achieve my goals or to satisfy my wants and needs.
As for AI, let’s do the obvious thing here and ask AI about AI. I use ChatGPT (which is covered in greater detail in Chapter 2). My question (more commonly known as a prompt):
“Please define and explain AI in less than 150 words as if I were an eighth grader.”
The response from ChatGPT is in Figure 1-1.
FIGURE 1-1: Asking AI about AI.
Cool! ChatGPT says it’s like a smart robot that can help you with your problems and tasks. That’s my kind of answer. Throughout the book I use examples from AI tools, predominately from ChatGPT and also AI-enhanced tools such as Bing Chat (yes, the turbo-charged version of Microsoft’s Bing Search engine).
I wrote this book fully mindful that AI is constantly changing and improving. Make it a point to visit any resource listed throughout this book (especially in Part 6) that is relevant to your concerns (and plenty of valuable resources are included). The resources are both general and specific, but timely, and they are constantly updated to help you keep up with AI’s development.
Distinguishing the Two Types of AI
Although I could ask AI to provide an extensive explanation of AI and I could spew all the facets and jargon about it, I’ll stick to my terminology about AI in the following sections. The two types of AI are general and specific. Horizontal and vertical would also do.
General AI
The reason I also refer to general AI as “horizontal” is that this type of AI spans the vast digital landscape to produce the response to your inquiry or request. It can be good for starters and for general knowledge.
A good example of this type of AI is the popular ChatGPT (see Chapter 2). Despite its awesome capabilities, I wouldn’t use it for an intense, specific purpose. For example, I could use it to learn skills such as creating a web page, but I wouldn’t rely on it to learn about brain surgery or cancer. I would go to specialized sources for that or (better) human experts.
Another general AI tool to add to your arsenal would be AI-enhanced search engines. The last time I looked, you could choose from 18 AI-enhanced search engines, but that number may have changed in the time it took for you to read this! You can find them in Appendix B.
Specific AI
Vertical or specific AI concentrates on a given topic or specialty. Good examples of this are robo-advisors (covered in Chapter 7). Keep in mind that part of the power of AI is that it uses its technological power to learn about what it’s working on. Some AI tools specialize in finance, but other tools specialize in healthcare, and so on.
I think the best example of this is when you need medical treatment or the attention of a doctor. You would first go to a general practitioner (GP). But after that you may need some specialized attention. The GP may know about your heart, for example, but the GP would ultimately need to refer you to a cardiologist. Think of general and specific AI in the same way.
In Chapter 3, different categories of AI are covered; take a look there for some excellent AI directories that can help you find the right AI tool for whatever issue you want to address.
Investing in Stocks with AI’s Help
The primary reason you may have gotten this book is because the title includes both “AI” and “investing,” and the heart of this combo is covered in Part 2.
Keep in mind that in this book, as with most of the investing books I author, I point out the crucial distinctions between “investing” and “speculating.” To put it simply, investing is putting your money into assets and/or vehicles that have value today and the possibility of much greater value over time. Meanwhile, speculating is essentially like educated gambling, hopefully to make greater gains sooner despite greater risks. Everybody wants to get that amazing stock when it’s cheap and obscure and to watch it soar to mind-boggling levels as “ka-ching” is ringing in our brokerage accounts. It could happen with your investing (such as large-cap tech stocks), and you could hit it big with your speculating (such as with small-cap stocks), but you should know the difference.
For investing in large-cap stocks that are neck-deep in AI, head over to Chapter 4. If you’re looking for that small company that could soar to the moon, check out Chapter 5. Just keep in mind that many of today’s small tech companies won’t be around a few years from now, so take heed of the word “fundamentals” (covered in Chapter 8) since that is at the heart of true investing. Speculating, meanwhile, is a stone’s throw away from financial gambling, so learn the difference.
For those of you who want to get into AI in a safer way, consider going through exchange-traded funds (ETFs) and/or mutual funds, which are investing in AI through a portfolio approach. See Chapter 6 for details.
Using AI to Try Stock Investing Alternatives
The prior section covered investing in AI-related vehicles. But keep in mind that AI is a versatile tool that can be used across the investing landscape. Part 3 goes into assets from precious metals and commodities to cryptocurrencies and real estate. Getting into these areas will be much easier with AI as your digital research assistant.
Perhaps the hidden gem for you is Chapter 12. It concentrates on helping you with AI to tackle business and career ventures. For many folks, the rise of AI brings some concerns and uncertainty. Here is where you turn lemons into lemonade, and boost your professional prospects and see AI through the lens of possibilities. Be like me and make an AI-assisted home-based business part of your financial situation (check out my AI resources at www.ravingcapitalist.com/AI/).
Looking at Your Total Financial Picture with AI
Don’t just look at the investment landscape. Use AI to kick it up a notch and be holistic with every corner of your financial situation.
As I write this, the national economy and the world’s geopolitics are bringing uncertainty everywhere. Be prepared. AI can be used for analyzing the economy (see Chapter 13) so you know what to do whether you are facing a recession, inflation, or both (or worse).
Keep in mind that investing is a part (yes, a large part) of the financial planning process. Get to know the other parts, too. Part 4 goes into retirement planning, budgeting, and much more, so don’t ignore these vital parts of your situation. Of course, you need to address the tough stuff like estate planning and taxes (ugh), but AI makes it easier than ever to deal with these issues.
In some of these areas you’ll likely need a human expert, but AI will make the process so much easier, reduce your stress, and increase your knowledge and confidence.
Getting Smart about AI
For those of you who want to get really informed about AI (beyond the scope of this book), here are some places to turn to that place a heavy emphasis on the world of AI:
AI Practical Guide
(
https://aipracticalguide.com/
): They have a beginners’ guide as well.
IBM’s developer blog
(
https://developer.ibm.com/
): Why not learn the technical side with what is arguably AI’s longest participant?
Adult education sites
such as Coursera (
www.coursera.com
) and Udemy (
www.udemy.com
): They have some excellent free and low-cost courses on AI.
Appendix A has more AI educational resources.
Chapter 2
A Primer on ChatGPT
IN THIS CHAPTER
Getting an introduction to ChatGPT
Picking apart AI prompts
Considering the disadvantages of ChatGPT
Checking out alternatives to ChatGPT
Although AI has been evident in recent years through consumer apps like those annoying voices when you call a company’s main telephone number and Amazon’s Alexa and Google’s Siri (and many more applications when you think of them), the dam broke on the public’s radar screen about the power and potential of AI when ChatGPT was launched in 2022.
ChatGPT hit one million users in record time and much more quickly than any prior tech launch. Netflix, for example, didn’t hit one million users until three years after it launched. In this chapter, I introduce you to using ChatGPT and list some alternatives to consider.
Acquainting Yourself with ChatGPT
ChatGPT was created and launched by Open AI, and it can be accessed at https://chat.openai.com. There are two versions at the time of this writing: the free version (GPT version 3.5) and the premium version GPT Plus ($20 per month for version 4). The free version is fine for your AI investing pursuits now so that you can get comfortable interacting with it and exploring its power and potential.
ChatGPT offers plenty of help. Besides many forums and educational sources online (many are listed in Appendix A), ChatGPT’s creator is a great first place to start: https://help.openai.com/en/.
Asking ChatGPT to describe itself
Why not have ChatGPT introduce itself? Use the simplest prompt imaginable:
“What is ChatGPT?”
ChatGPT’s response when I asked this prompt is in Figure 2-1. This figure is of the interface itself.
FIGURE 2-1: An introduction from ChatGPT.
As far as the name goes, “Chat” refers to your interaction with it, and the “GPT” refers to “Generative Pre-trained Transformer.” Find out more about the meaning of the term “ChatGPT” at www.coursera.org/articles/chatgpt.
Discovering what ChatGPT can help you with
I think that you could be like a kid in a candy store after you start using ChatGPT and getting creative with your prompts. Let’s get your creative juicing flowing by giving you some ideas of what you can accomplish with ChatGPT. Consider a prompt like this:
“Please provide a list of ten specific benefits and services that ChatGPT can provide to investors. Please give an explanation and an example of each item.”
The first part of ChatGPT’s response is in Figure 2-2. Note that number 4 is about portfolio diversification strategies. Right out of the starting gate, you have issues you can address or discuss with your financial advisor. Take each issue and ask AI about them in depth; it will only enhance your knowledge and performance as an investor.
FIGURE 2-2: The first few things ChatGPT can help with.
Figure 2-3 provides the next batch of items for the investor’s consideration. Take item number 7 on dividend stock selection. Dividends are an important part of a long-term stock investing strategy (especially for income investors). You can use AI to locate, analyze, and choose dividend stocks.
Figure 2-4 wraps up the choices with IPOs (initial public offerings) and long-term strategies, both of which can be handled with AI. IPOs are covered in Chapter 5, but now you know that AI can help you choose in a way that was not possible before.
FIGURE 2-3: More things that ChatGPT can assist with.
FIGURE 2-4: ChatGPT can provide plenty of help.
I don’t mean to overwhelm you, but to invite you to start getting proficient with a groundbreaking new technology that will only get better and more proficient for those willing to embrace it.
It’s All About the Prompt
Your part in using ChatGPT is to enter your question or request, and this is referred to as the “prompt,” which makes sense; you’re prompting it to generate a response you’re seeking.
Yes, you can prompt about anything, but let’s keep it in the realm of this book’s financial topics. Here’s an example in which I prompted ChatGPT about prompts:
“Please provide a list of 20 useful prompts for financial planning and investing with an explanation and an example of each.”
The first part of ChatGPT’s response is in Figure 2-5. Using AI to use AI could be the first best approach for investors. Take the item of risk tolerance assessment. Plenty of investors are not that sure about their own tolerance for risk. Using AI to go in-depth here will ultimately mean making choices that will make your path going forward less stressful.
FIGURE 2-5: Some financial planning and investing prompts.
Figure 2-6 covers additional financial planning and investing prompts from ChatGPT.
FIGURE 2-6: Additional financial planning and investing prompts.
You find guidance on creating useful investing prompts throughout this book, but here is a simple two-step formula for creating a useful prompt (until you get proficient):
Give the AI tool (such as ChatGPT) a scenario as the first part of your prompt.
For example: “I am a 60-year-old single woman with $X amount in my 401(k) plan …”
Then give a specific question as the second part of your prompt.
For example: “I am considering a growth fund, but I want to compare the pros and cons with a growth-and-income fund.”
When you get proficient with ChatGPT, understand that you can grow with it. ChatGPT has many uses and add-ins so you can get productive. Check out the possibilities here: https://platform.openai.com/examples.
The Limits and Negatives of ChatGPT
Keep in mind that ChatGPT is far from perfect, and some of its drawbacks and glitches can be problematic. If you’re seeking answers to very important questions in your life — money, health, and so on — please consult with human experts where applicable. If you’re doing research, then consult with multiple sources.
Here are some of the disadvantages of using AI to help with your investing and other financial pursuits:
A limit on knowledge:
ChatGPT 3.5 (the free version) does have a time limitation (January 2022 at the time of writing).
Bias:
If you’re asking questions about philosophy, politics, public policy, and related areas in which human bias can be strong, then you may get skewed answers. Note that “garbage in equals garbage out” was first coined when computers became mainstream decades ago, but that saying is just as true (maybe more so) with AI since so many biased humans are involved in both the programming and the data formation.
Incorrect answers:
Until they get the bugs and glitches out, there will be the possibility of errors and poor and/or inaccurate answers and responses. Again, check multiple sources — especially if the topic is very sensitive or important to you.
Cannot provide personal advice:
Because AI tools for the most part do not (yet!) have access to your personal data, refrain from asking very personal questions. Yes, you can give it scenarios and example problems and issues, but just understand that AI is not developed yet to give you mindful, sentient guidance similar to human experts.
Other issues with AI:
I won’t seek to be comprehensive about all the failings and shortcomings of AI, but at this point why not ask ChatGPT or other AI this pointed question? Since it isn’t emotional and won’t take the question personally, it’s remarkably open about its own problems and shortcomings.
Looking at ChatGPT Alternatives
Before you think it’s ChatGPT 24/7/365 around here, keep in mind that there are alternatives for your consideration. Who knows? Maybe a week or a year from now, one of the following sites surpasses ChatGPT. In fact, some of these already have done better than ChatGPT in some tasks:
AnonChatGPT:
For those who want to use ChatGPT anonymously to preserve their privacy, this is a good consideration. For more details, go to
https://anonchatgpt.com/
.
Bing Chat:
Microsoft Edge’s Bing search engine coupled with the power of ChatGPT competes with Google’s Bard. Check it out at
www.bing.com/chat
. I have been using Bing Chat, and I like the AI enhancements. Some of its capabilities are superior to ChatGPT.
ChatPDF:
One of the drawbacks of ChatGPT (the free version 3.5 at least) is that it can’t review or summarize PDFs. With PDFs so ubiquitous both online and probably on your hard drive, ChatPDF (
www.chatpdf.com/
) can be very useful.
Copy.ai:
Found at
www.copy.ai/
, many users feel that Copy.ai is better than ChatGPT for summarizing and writing in general.
Google Bard:
You didn’t think that Google was just going to sit on the sidelines, right? Check out Bard at
https://bard.google.com/
. It has the power of Google behind it so it has plenty of capabilities. It is also free (as of this writing) and can access live and real-time internet data. This is a big advantage over ChatGPT’s time limitation (the last update was January 2022 for the 3.5 version).
Sites such as Writesonic (https://writesonic.com/), Lifewire (www.lifewire.com/), and other sites listed in Appendix A regularly review and compare various AI tools. Writesonic, for example, did a post titled “Top 30 ChatGPT alternatives that will blow your mind in 2023 (Free & Paid)” found at https://writesonic.com/blog/chatgpt-alternatives/.
To get proficient with ChatGPT, it can be good to be part of a like-minded group to ask questions, share ideas, and so on for ChatGPT. Consider joining the forum of users at Discord (https://discord.com/invite/openai).
Flip to Chapter 3 for details on different inputs and outputs of various AI tools (audio to text, text to image, and the like). For more ChatGPT educational resources, head over to Appendix A.
Chapter 3
Spanning the AI Landscape: Different Inputs and Outputs
IN THIS CHAPTER
Using text-to-text AI for your financial needs
Trying other AI inputs and outputs
Finding different types of AI tools
The purpose of both your investment pursuits and your AI secret weapon are ultimately to make your future years as financially comfortable as possible. Using AI now makes it easier to plan your future.
In this chapter, I focus on grouping AI technology according to the user’s perspective and needs. As I write this, hundreds of AI tools and apps are available, and by the time you read this, there will likely be thousands. The good ones will survive, but many will go into the dustbin of technological history.
I lay out this chapter as an “input-to-output” mode. You provide the input (your wants, needs, issues, and so on), and AI will provide the output (responses in text, audio, graphic images, programming, and so forth).
First Things First: Text-to-Text with Chatbots
When the most well-known chatbot, ChatGPT, exploded on the scene in late 2022, the public was getting a taste of what was to come. This is the use of AI like an information genie. Don’t just ask it three questions — ask numerous questions of this genie.
ChatGPT (covered in greater detail in Chapter 2) is an AI tool designed to interact with you and provide responses to your questions and requests (prompts). The most obvious interaction is asking a simple question and then getting an answer moments later. Part of the genius of this chatbot (and its competitors) is that it is interactive and keeps track of your questions so that it acts seamlessly as a dutiful and patient all-knowing robot.
