Last November, OpenAI launched the intelligent language tool, ChatGPT, and it’s since exploded in popularity and netted a $10 billion investment from Microsoft.
The bot has impressed me with how well it can spit out articulate, comprehensive explanations for things as varying as dating app messages to news articles.
Earlier this month, I asked ChatGPT to share its thoughts on the stock market, and it gave a surprisingly thorough breakdown of meme stocks, S&P 500 moves, and lingering market impacts from the pandemic.
Here’s what the AI tool had to say when I asked for a good investment strategy for a recession.
ChatGPT’s 5-part investing strategy
The bot’s history only goes as far as 2021, so it doesn’t have access to real-time markets data or news of current affairs. Yet, the portfolio advice it produced was similar to that of human strategists I’ve spoken to this year.
“During a recession, it is important to have a well-diversified investment portfolio that can weather market volatility,” ChatGPT wrote.
Then it listed out the following:
Defensive sectors: “Sectors such as healthcare, utilities, and consumer staples tend to perform well during a recession because they provide essential goods and services that are in demand regardless of economic conditions.”
Bonds: “Bonds are considered a “safe haven” asset class because they provide a steady stream of income and can protect against stock market volatility. During a recession, it may be wise to invest in bonds issued by the U.S. government or high-quality corporations.”
Value stocks: “These companies typically have strong fundamentals, such as high cash reserves and low debt levels, which can help them weather economic downturns.”
Real estate: “Real estate can be a good investment during a recession because it is a tangible asset that can provide cash flow through rental income. While the real estate market may be affected by the recession, the impact is not as severe as the stock market, and the long-term prospects of real estate remain positive.”
ChatGPT emphasized that a recession is a short-term economic slowdown, and markets eventually recover. That means investors would be wise to adopt a long-term perspective on each of these investments, it said.
As any cautious advisor would warn, the bot concluded with the reminder that “past performance of an investment is not indicative of future performance and that investing always carries risk.”
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
