COLUMBIA — Artificial intelligence is not only writing essays and generating images for young people, but it’s now helping some of them decide how to invest their money.
Young investors are increasingly turning to apps like Robinhood and Wealthfront, which use AI to simplify investing. Others are even asking ChatGPT to draft retirement plans or stock research guides.
Michael Young, an assistant professor of finance at the University of Missouri, said AI can be useful, but students should be careful not to rely on it too heavily.
"I think some people maybe use it as like a crutch," Young said. "They type in whatever the prompt is and they just take that as given, that's what they follow. I think that's the way people are using it. It's kind of, they need to be careful in the way they use it like that. You know, they are not perfect."
For Miles Vollet, a young investor, AI has become a helpful tool for learning the basics of stock research.
“I started using AI as a tool to help make better decisions and do the grunt work,” Vollet said. "AI is super helpful. As long as you understand that it's just a tool, just like using a computer or something, and you understand its limitations, then it's going to be super helpful most of the time."
Young said he gave ChatGPT a prompt saying, 'I'm just graduating college and I want to start my portfolio, I have a couple of goals, what should I do?'
Within minutes, it produced a five-page retirement plan filled with index fund and retirement account suggestions. While he said some of the advice was good, he warned that AI is limited by the data it was trained on and cannot predict future market conditions.
"The only knowledge it has is the information it’s been trained on," Young said. "You don’t know when that started, you don't know when that was stopped. So you have to be very careful."
Experts, like Young, recommend that young people focus on safer long-term strategies, like index funds, and use AI as a starting point for research, not a final answer.
"I pretty much always double check," Vollet said. "I'm not going to put in any money that ChatGPT told me, but it is definitely good to just get ideas, you know, stuff that you can work too and kind of improve on yourself."
Young also cautions that students should remember who they’re up against before blindly following AI.
“I think the other thing for people to remember is when you are trading in the stock market, you are using it to try and pick stocks, you are competing against all the other stock market participants," Young said. "You are competing against hedge funds, and high-frequency trading firms, mutual funds, and they all have access to the same technology. They all have 20, 30 years of experience of being a fund manager, they know how to use this information."