[Beginner’s Guide] How to Use ChatGPT for Stock Investing: 5 Steps to Choose the Best Stocks

AI technology is revolutionizing the world of investing. Especially, “AI investing” leverages artificial intelligence to conduct market analysis and stock selection, allowing for efficient information gathering and analysis.

This article outlines five steps to select stocks using ChatGPT. With its natural language processing capabilities, ChatGPT can analyze large amounts of data, making it easier for beginners to make informed investment decisions.

Unlike traditional analyst reports, using ChatGPT allows for quick and efficient data gathering. Improve your investment accuracy by harnessing AI!

[Shocking] Can GPT-4 Outperform Analysts? The Incredible Predictive Power of AI

In recent years, the advancement of AI technology has had a significant impact on investment decisions.

According to a report from Gigazine, GPT-4 has demonstrated superior predictive abilities compared to human analysts, especially in analyzing financial statements and forecasting earnings with high accuracy.

Additionally, by using the “Chain of Thought” (CoT) prompt technique, AI can achieve more accurate predictions through a step-by-step reasoning process.

CoT prompts allow the AI to break down complex problems into smaller steps, rather than jumping straight to the final answer, thereby improving accuracy.

The newly introduced o1 preview in September 2024 for OpenAI’s ChatGPT model utilizes CoT to significantly enhance its reasoning capabilities.

Gigazine – Study on GPT-4’s Predictive Power

[5-Step Guide] Get Started with AI Stock Investing Using ChatGPT! Easy Stock Selection for Beginners

1. Develop an Investment Scenario Based on the News

Start by forming a hypothesis based on the news and market trends.

For example, if “Harris wins the presidential election, there could be policies supporting affordable housing for young people,” you might want to focus on home construction companies as potential investments.

Bloomberg – Harris Proposes $25,000 Support for First-Time Homebuyers

2. Use ChatGPT to Research Competitor Companies

Next, use GPT to identify competitors by asking the following question:

What are some major home construction companies?

In the U.S. home construction industry, major companies like D.R. Horton, Lennar Corporation, PulteGroup, and NVR, Inc. are worth considering as investment opportunities.

3. Evaluate Financial Health and Growth Potential with ChatGPT

Then, research the most recent earnings for each company using GPT.

It’s crucial to carefully research each company’s latest earnings individually. Analyzing multiple companies at once could lower the accuracy, so it’s better to review them separately.

Analyze the latest earnings for D.R. Horton, focusing on financial health and future outlook.

D.R. Horton maintains strong performance, but challenges in the market remain. The company aims for growth in 2024 through strategic adaptations.

Analyze the latest earnings for Lennar Corporation, focusing on financial health and future outlook.

Lennar Corporation shows steady performance and a strong financial foundation, and it is expected to continue growing while addressing market challenges.

GPT can analyze each company’s financial data, providing detailed insights into growth potential and risks. Use this to conduct a competitive comparison.

By asking this, GPT will retrieve recent earnings data.

4. Let AI Assist in Stock Selection

Once you’ve gathered the data for each company, ask GPT which company it thinks is the best investment.

Which of the five companies is the best investment?

If I had to choose, I’d recommend D.R. Horton. Its market size, financial stability, and ability to manage political risks make it a promising investment.

With this question, you’ve narrowed down the most promising companies for investment.

5. Final Check with Gemini! Enhance Accuracy with a Multi-Angle Approach

Finally, send your conversation history with GPT to another AI, Gemini, to evaluate the conclusions.

Evaluate the conclusions drawn from the following conversation history. (Full ChatGPT conversation)

The conclusions appear highly valid. D.R. Horton is an attractive investment based on market share, financial health, and valuation. However, mentioning broader economic risks and the housing market would provide a more comprehensive analysis.

By using different AI models for evaluation, you can gain insights from various perspectives, making your analysis more thorough.

This multi-AI approach enhances investment decision accuracy and provides a more reliable conclusion.

Conclusion: Streamline Asset Management with AI Investing [ChatGPT Usage Guide]

This article outlined five steps to leverage ChatGPT for AI-powered stock investing.

AI investing allows for efficient news analysis and earnings evaluation. ChatGPT, in particular, simplifies complex financial data for beginners.

Combining it with AI models like Gemini can further improve the accuracy of your investment decisions.

Try using ChatGPT to make more efficient and precise investment decisions.