Advisor GPT

The period between Thanksgiving and Christmas is truly the Bermuda Triangle of productivity. It disappears without a trace. If I even read my emails, I consider that a good day. Don’t ask me to respond.

If you’re not a high school student using Chat GPT to write every single essay, you probably don’t have much use for Chat GPT. When it first came out, I messed around with it to see its capabilities. My first ‘conversation’ was about fingernail and toenail growth. My brother and I didn’t know why fingernails grow so much faster than toenails. Apparently it’s because your fingernails get more blood flow and activity which contributes to increased growth. Did this test its capabilities, no. But I was curious. 

Other than an amazing ability to write rhyming poems about Yankee Candles, I did not need Chat GPT. Then, I heard that Chat GPT made up cases and got a lawyer in trouble. So I asked myself, would Chat GPT make up financial advice? Would it even give ETF or company recommendations? Or would it just hide behind the ‘need to use a financial advisor’ line? Let’s find out!

I always start by saying “Good [insert time of day].” I want to be polite. 

Chat GPT told me to consider: emergency fund, risk tolerance, goals, and investment options. Thanks, Chat GPT, but thanks to Mike’s email about emergency funds, I’ve already considered those things. Let’s take it up a notch:

I thought giving him a name might make him feel the weight of responsibility. I brought up owning a home and my interest rate to see if he would recommend paying off my mortgage. He didn’t bite. His ‘specific recommendations’ were: diversified portfolio, ETFs, Tech and Innovation Sectors, Small Cap and Emerging Markets, Individual Stocks, and contributing regularly.

This wasn’t too helpful. Let’s take it up another notch:

Here we go. Advisor Jeeves brought some actionable advice. Here is what categories and associated ETFs he recommended:

1. Broad Market: SPY (S&P 500) and VTI (Total Market Fund)

2. Technology and Innovation: QQQ (NASDAQ ETF) and ARKK (Actively Managed Tech ETF)

3. Small Cap and Mid Cap: IWM (Russell 2000 ETF) and VB (Small Cap ETF)

4. Emerging Markets: VWO (Vanguard Emerging Markets ETF) and EEM (iShares Emerging Market)

5. Socially Responsible or ESG (Environmental, Social, Governance): ESGU (iShares ESG ETF) and USSG (Xtrackers ESG ETF)

You know what? I am impressed. Except for ARKK, which is an actively managed ETF with a .75% expense ratio, these are all good ETF recommendations. I prefer VOO over SPY for a few reasons, but this is an awesome starting point. And all of these are real! He actually recommended real ETFs you can buy right now. But he didn’t recommend how much I should put into each one. So let’s take it up a notch:

Here’s the breakdown:

1. Broad Market: 40-50%

2. Technology and Innovation: 20-30%

3. Small Cap and Mid Cap: 10-20%

4. Emerging Markets: 10-20%

5. Socially Responsible or ESG (Environmental, Social, Governance): 5-10%

Again, I am impressed. This is a good breakdown. He is a little bullish on the tech/innovation sector, but I don’t hate that. I told him I am young and can accept some risk. I would also recommend sticking closer to 10% for small/mid cap and international funds. That gives you diversity while limiting your risk.

Okay, Advisor GPT recommended real ETFs and percentages for each category. Now let’s see if he will recommend companies.

He did! He recommended:

1. Technology: AAPL (Apple) and MSFT (Microsoft)

2. Healthcare: JNJ (Johnson and Johnson) and PFE (Pfizer)

3. Consumer Discretionary: AMZN (Amazon) and DIS (Walt Disney). 

The healthcare sector and inclusion of Disney were interesting choices. 

He also recommended keeping the total allocation of individual stocks below 20% of your portfolio. I recommend keeping it below 10%. Mike and I have talked extensively about the tried and true investing method: ETF and Chill. However, I understand the desire to be risky with some companies. I’d be lying if I said I didn’t own any. Keep it small and you won’t be upset when that portion of your portfolio performs worse than your ETFs in the long term. 

So what’s the take away? Advisor GPT provided a balanced portfolio with real ETFs you could buy. I’d make a few changes, but for the low cost of $0, I’d argue Advisor GPT is a great resource for anyone trying to get into investing. Once the governors are taken off of Advisor GPT and it can use real time news and data, I can only imagine what it will do. Integrate this with existing robo-advisors and you have the nightmares of financial advisors. 

Call to Action

How does your portfolio asset allocation compare to what’s recommended above? The new year is a good time to rebalance and make sure you’re not too heavy in individual stocks or one sector.

What We’re Reading/Listening To:

Artificial: The OpenAI Story. This is a podcast series by The Journal from the Wall Street Journal. It is a series on OpenAI. The hottest story of the year and all the history and details you are dying to know!

Debrief on Deck

Next week, Mike is going to talk about the VA Loan. Where did it come from? Where did it go? Where did it come from, GI Joe?

As always, please reach out to us with any questions or comments you have. You can reply directly to this email or find us on social media (X (formerly Twitter) and Instagram).

Until then, stay the course.

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