Artificial intelligence is helping companies run more efficiently and offer more choices for their customers. The technology can minimize human errors and reduce operating costs, leading to higher profits. It can make people’s lives easier with personalized product recommendations, enhanced cybersecurity and quicker access to relevant information.
Some investors are also turning to new AI tools for stock picks and advice on how to manage their portfolios. Artificial intelligence can make stock picking seem easy. You can use search prompts like “best dividend income stocks” and “best growth stocks” to find investments that match up with your preferences. OpenAI’s ChatGPT large language model, for example, can give you 10 stock recommendations in a few seconds, along with summaries of what each company does. Alphabet Inc.’s (ticker: GOOG, GOOGL) Gemini language model can also provide stock recommendations based on the same prompts.
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AI can cut down on research and give you quick picks, and more investors are picking up on this emerging trend. More than half of Americans use artificial intelligence, and that number is likely to grow as the technology becomes more advanced.
The popularity of AI tools is growing among investors, but are these developments beneficial for returns? Does it make sense to use AI for your stock picks instead of investing in a mutual fund or exchange-traded fund (ETF) and relying on the fund’s managers to make your picks?
— What to look for in an AI tool.
— AI stock-picking tools.
— Magnifi
— TrendSpider
— Streetbeat
— Ainvest
— Cryptohopper
What to Look For in an AI Tool
AI tools let you find stocks that align with your objectives, but there’s a subtle benefit that can significantly impact your long-term profits. Blaine Thiederman, a certified financial planner and founder of Progress Wealth Management, says AI doesn’t succumb to human factors that can limit portfolio growth. “AI algorithms are not influenced by human emotions, such as fear or greed, leading to more objective decision-making,” he says.
Up-to-date information and objectivity make for a good start. Here are some other features to look for in an AI tool:
— Versatility. Some AI tools let you ask more detailed questions, which can help you find optimal investments for your portfolio.
— Trading signals. Some AI products let you find stocks that recently reached or exceeded key technical indicators. Traders won’t have much luck with ChatGPT or Gemini because those AI tools do not let you see real-time trading signals. Some tools can also make investments for you when stocks reach certain price points or technical lines, saving considerable time.
— Data availability. Does your AI stock picker let you see a stock’s volume, moving average and other details? Some AI tools have better information on your favorite stocks than others.
— Stock scoring. While this feature shouldn’t make or break your decision about an AI investing tool, a scoring system can tell you what the AI tool “thinks” about a stock. You should familiarize yourself with the methodology used to formulate the score before taking it seriously.
[READ: Misinformation and the Stock Market: Will AI Raise the Risk to Investors?]
AI Stock-Picking Tools
While ChatGPT and Gemini are general AI services, other tools specifically cater to stock investors. You can choose from several AI options for your stock picks. It’s important to do your due diligence when deciding to make an AI tool part of your investing strategy, and this is just a snapshot of what’s out there. All have a mobile app version for smartphones:
Magnifi
Magnifi lets you connect your brokerage account to the app so you can use AI to analyze your portfolio. You can ask Magnifi’s AI assistant questions about your portfolio and finances to discover great stock picks and ways to save money. For instance, you can ask Magnifi if you are paying excess fees for your mutual funds. Magnifi will review your holdings to see if your expense ratio is higher or lower than average, then give you the option to see several lower-fee alternatives. You can also ask how much exposure your portfolio has to a stock, and Magnifi will give you the exact percentage. This calculation includes any indirect exposure you have through mutual funds and ETFs.
Magnifi matches its strategies to your risk tolerance. The app will make different recommendations based on whether you have a high risk tolerance or are risk-averse. Magnifi also provides commission-free trades so you can keep more money in your pocket.
TrendSpider
This technical analysis-based AI tool comes with a bot, asset insights, back-testing and other features. Back-testing lets you see how your current strategy would have performed in previous market cycles.
TrendSpider also includes real-time scanning and idea generation. You can search for market opportunities based on chart patterns, recent news, analyst actions and other parameters. The tool uses custom heat maps to display technical and fundamental data in a comprehensive, concise way.
While you can use TrendSpider’s data to inform trading decisions, you can also set up a trading bot to make trades for you. Each trading bot is based on a predetermined algorithm. You control the inputs and can back-test any strategy before setting the trading bot loose.
Streetbeat
Streetbeat is an AI-powered advisor that assists investors with creating their own portfolios. The app offers guidance and leaves the decisions up to you.
The company also has a tuition program that lets you receive up to 25% off your college tuition. You receive points for various actions, such as inviting friends and paying your monthly subscription. Each point equals $1 off your tuition bill. Notably, you will receive points every year equal to 10% of assets under management. For instance, if you have $10,000 in your Streetbeat account, you will receive 1,000 points. That’s a $1,000 discount on college tuition at 450 participating universities. The points you receive will grow as you put more money into your portfolio.
Streetbeat also has useful features for people who graduated from college long ago. You can ask Streetbeat for top stocks in specific sectors and industries. Streetbeat will give you a list of top stocks and can even create customized portfolios based on your requests. Daily, weekly and monthly rebalancing options are available. You can also run back-tests for certain criteria to determine if the strategy has worked before.
Ainvest
Ainvest offers several AI-powered stock screeners and lets individuals apply additional parameters. It’s one of the app’s many features that help investors research and analyze stocks with artificial intelligence. The app also lets you scan the news and validate ideas with back-testing.
The company’s chatbot, Aime, acts as an AI advisor. Aime lets you see key fundamental and technical indicators before buying or selling shares. It also offers clear explanations of important concepts and list the pros and cons to help you make well-informed trades. Aime can analyze your stock trades in other brokerage accounts as well, such as those from Fidelity and Robinhood.
Cryptohopper
Cryptohopper is an AI crypto trading bot that lets you buy and sell crypto 24/7. Using the bot removes the emotion from crypto trades and helps you stick to your strategy. You can create your own crypto bot or use templates that you can fully customize. The tool offers paper trading, too, to give you practice without incurring losses.
Cryptohopper lets you incorporate several strategies, such as stop-loss orders, dollar-cost averaging and trailing orders. Investors can also copy crypto bots from successful traders and go with what’s currently working. Cryptohopper has more than 750,000 created accounts on its platform.
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Can AI Pick Stocks? 5 AI Investing Apps to Try originally appeared on usnews.com
