Discover What Happened When I Tasked ChatGPT with Investing £10,000 in a Stocks and Shares ISA
The end of the tax year is approaching, prompting many investors to strategize for their Stocks and Shares ISA. While artificial intelligence can provide insights, human judgment remains vital. I decided to explore potential stock investments using ChatGPT, allocating £2,000 to each of five suggested stocks.
My Current Portfolio
To enhance diversification, I informed ChatGPT of my current holdings. This includes:
- Legal & General Group
- M&G
- Lloyds Banking Group
- GSK
- Taylor Wimpey
- Diageo
- Glencore
- 3i Group
- Bunzl
- Burberry
ChatGPT noted my portfolio’s heavy weighting in financials, consumer staples, mining, and housebuilders. Therefore, its recommendations targeted sectors where I was underweighted, including tech-adjacent industries, energy transition, healthcare services, defense, and infrastructure.
ChatGPT’s Recommendations
Here are the stocks that ChatGPT proposed:
1. National Grid
ChatGPT emphasized National Grid’s predictable revenue and reliable dividends. It highlighted the company’s lower volatility but raised concerns about its debt levels amid extensive investment in renewable energy. This concern makes it a less appealing option for my portfolio.
2. BAE Systems
Next, BAE Systems emerged as a pick. Although its shares have performed well recently, I am hesitant following such a strong price surge, particularly with potential geopolitical shifts in Ukraine.
3. AstraZeneca
AstraZeneca was also featured despite my existing holding in GSK. Recognized as a solid company, I prefer not to double up on similar investments.
4. Segro
Segro, a logistics and data center real estate investment trust (REIT), was the fourth suggestion. ChatGPT noted its benefits from e-commerce growth but warned of potential squeeze on rental yields due to rising vacancies. Despite a 10% decline in shares over the past year, its 4.25% yield and recovery potential merit further investigation.
5. Spirax Group
Finally, ChatGPT mentioned Spirax Group, though it mistakenly referred to the company as Spirax-Sarco Engineering. Spirax specializes in thermal energy and steam management. It is seen as well-positioned in energy efficiency and industrial decarbonization. However, the stock has seen a decline of 2% in the past year and 37% over five years. While its price-to-earnings ratio of 23.7 suggests it is not cheap, its long-term themes are interesting. Further research is warranted before making any decisions.
Artificial Intelligence in Investment Decisions
While AI can assist with preliminary research and suggestions, the final investment decisions should rely on human analysis. Investors must remain vigilant as they navigate the complexities of the market. Ultimately, understanding personal financial goals is paramount when managing a Stocks and Shares ISA.
