Artificial Intelligence (AI) is getting a lot of attention lately.
Some argue we need to be careful as it might destroy the world. Others are afraid it will do their job better than they can.
My teenage children could ask it to do their homework for them but instead get AI to write funny limericks about their grandparents…
In this short video I ask Chat GPT 5x questions to show you what AI knows and, more importantly, what it doesn’t know.
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For a transcript of the video, keep reading:
In this video I’m going to show you artificial intelligence. I’m going to show you what chat GPT’s website can do, what it got right, what it can do, and also more importantly, what it can’t do.
The first point to make is I’m going to ask it a non-financial question to start with, just to show you what it can’t do. So I asked it, is it going to rain tomorrow? Chat GPT says “I don’t have access to real time weather information”. Now this is important, “my training data only goes up until September 2021”. And that’s important if you can ask any financial question, the data it’s drawing on is nearly two years out of date.
My first financial question is: what is the best long-term investment for a UK individual to protect against inflation? You’re also seeing here I’ve used the words ‘UK individual’ in the question quite a few times because it’s very American. It uses a lot of American terminology if you don’t put that in there. As we can also see some of the answers. I mean, they’re really bland, they’re really not specific at all.
So here we go. It says, to protect against inflation, there are several investment options to consider. First one is stocks. I agree. “Stocks have provided potential against hedge against inflation over the long term”. Real Estate again, yeah, okay. American terminology, they mean property. Now, this is where it gets it wrong: Treasury Inflation Protected Securities. TIPS. TIPS are what the American government issue. The UK government issues index linked gilts and to be honest, they’ve also been a terrible hedge against inflation last year as well. Commodities. I’m not so convinced about that. But a diversified portfolio. Yes, okay, very bland, very boring, but probably right. No investment is completely risk free. They say that quite a lot. Consult a financial adviser obviously, I’m going to agree with that one.
How should the UK individual investment capital growth in 2023? Well, I’ve asked it specifically for 2023, so it’s going to be nearly two years out of date, but again, you get some fairly bland answers. Equity investments again, “stocks have historically provided opportunities for capital growth over the long term”. “Consider investing in a diversified portfolio of stocks, technology companies, emerging markets, growth-oriented funds”, okay, I’m agreeing with those two. Also small and medium sized enterprises. Although this last one caught my eye, cryptocurrencies and blockchain technology. They’ve gained significant attention in recent years. Attention Yes. I wouldn’t use the word investing in cryptocurrency though, refer to my previous blogs, it’s not an investment it’s a gamble. Although they do importantly, say it’s crucial to thoroughly research and understand the technology risks and regulations before considering investing in this space. That’s because there aren’t any regulations and the risks are through the roof!
I also asked it: are dimensional funds any good for a UK individual? This is this is a pretty good answer actually. Key points to consider, this is the one thing we like about dimensional: “evidence-based investing”. There’s decades 50 years plus of academic research behind dimensional diversification you buy into 10,000 companies also through dimensional firms. Long term investment horizon, agree. Access and availability; Dimensional funds are typically available through financial advisor and wealth management firms, but it’s not typical. As far as I know, they’re only available through financial advisors and wealth management firms. And again, you get a bit of a caveat at the end, do your research, be careful investing in things. So yeah, I mean, I agree with all of those.
If I’m married, do I still need a UK Lasting Power of Attorney? This is a good answer, actually. I agree with them. “Yes, even if you’re married, it can still be beneficial for attorney”. Correct. Here are a few reasons why you can protection in a case of incapacity. Various decisions related to finances, property, health, and welfare. Flexibility: you have control over who makes decisions for you. I think that they’ve made the most important point last, preventing delays and legal issues. “Without an LPA in place your loved ones may need to apply to the court protection to obtain the authority to make decisions on your behalf”. I agree this can be time consuming. Yes, and expensive. Agree again and may not align with your preferences. This is a good sentence here as well: “it’s important to note that being married does not automatically grant your spouse legal authority to make decisions on your behalf”. That is absolutely correct. Just because you’re married does not mean you are automatically have the legal right.
Here’s another good answer. Should the UK life insurance policy be written in trust? I think they’ve got this really well actually: pays out quicker, you save inheritance tax, control and flexibility and your money is protected from creditors. All of those are correct.
Now here’s one thing that I wasn’t too sure about: is Chatfield Private Client Limited any good? They don’t give an answer. “As an AI language model, I don’t have access to specific up to date. information or personal opinions”. But they do say it’s always recommended to conduct thorough research and due diligence when evaluating any financial institution or service provider. So there’s obviously something in there somewhere to know that we’re a financial company, and then you get the usual bland answer of do your research, ask other people meet, with them personally. So, on the whole, that’s all right.
So that’s a very quick introduction to chat GPT and AI. I hope that gives you an idea of what that can do.
