Episode 13: Can you take advantage of artificial intelligence (AI) in your portfolio?
It's one of the most common investor questions regarding the rise of AI, a game-changing technology that seems to be affecting life in new ways almost every day.
By now, most people are probably familiar with common AI tools like ChatGPT that rely on large language models, which are advanced systems that understand and generate human-like text using data they've been trained on through machine learning.
Breakthroughs in generative artificial intelligence seem poised to benefit a wide gamut of businesses.
Nvidia has been an early winner in the movement, and its stock has reflected this success. But the cascade effect of AI has already spread beyond just the household tech names.
Many companies are adopting gen AI tools as implementation assistants to increase the efficiency and scalability of their businesses.
Eventually, we may reach a point where, like the internet, it's hard to fathom a time before broad AI usage.
The good news for investors is that they don't have to focus on technology companies to get exposure to AI. Diversified equity portfolios already have exposure—because AI tools touch nearly every type of business.
Some investors may want to go further by using AI to help invest. But there's a big difference between getting help from AI for everyday tasks at home or work and investing for retirement.
Dimensional Chairman and Founder David Booth is fond of saying that large language models are intended to understand and generate text that seems as if it was made by humans, not predict future outcomes. https://www.dimensional.com/us-en/insights/david-booth-in-the-financial-times-why-the-wisdom-of-the-market-crowd-beats-ai
Instead of relying on AI for picking stocks, Booth suggests relying on the power of market prices to help you invest for the future.
In Episode 13 of "The Informed Investor," Dimensional's Mark Gochnour, Head of Global Client Services, Wes Crill, PhD, Senior Client Solutions Director, and Jake DeKinder, Head of Client Communications, talk through the numerous ways AI is impacting the financial industry and offer incisive thoughts on the investment implications.
LINKS FROM TODAY'S EPISODE:
The Informed Investor on YouTube https://www.youtube.com/playlist?list=PLCyJr6FFig-h1mA7rVP7Mbk0irFw2wA90
Mark Gochnour on LinkedIn https://www.linkedin.com/in/mark-gochnour-9a23598a/
Wes Crill on LinkedIn https://www.linkedin.com/in/wes-crill-77a49417/
Jake DeKinder on LinkedIn https://www.linkedin.com/in/jake-dekinder-cfa-4105b98/
Learn more at https://www.dimensional.com/
