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AI financial advice is surprisingly good, especially if you ask right questions

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Re: AI financial advice is surprisingly good, especially if you ask right questions

#421

Post by jjav »

ncruces wrote: post #297
jjav wrote: post #282

Earlier quoted context omitted.

> Never buy or sell an individual security. This is controversial but very bad advice. No index funds, by their nature, will ever match the return of high-flying company stocks. If you have very little investment capital available, then yes, allocate it all to index funds because you can't afford to narrow it down yet. But as soon as you have some room to invest in individual stocks, do it. After about three decades…

> More than 60% of my net worth is just from two stocks. I would hope you realize that your good fortune (aka luck) does not generalize to an entire population.

There is some luck, for sure.

But it's not pure luck. Find good companies in an industry segment you fully understand (for me, that's Silicon Valley enterprise tech), invest early and hold on. You'll have many losers, that's totally fine. But the 50x or 100x returns will make up for it.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#422

Post by jjav »

throw0101a wrote: post #326
jjav wrote: post #282

Earlier quoted context omitted.

> Never buy or sell an individual security. This is controversial but very bad advice. No index funds, by their nature, will ever match the return of high-flying company stocks. If you have very little investment capital available, then yes, allocate it all to index funds because you can't afford to narrow it down yet. But as soon as you have some room to invest in individual stocks, do it. After about three decades…

> This is controversial but very bad advice. No index funds, by their nature, will ever match the return of high-flying company stocks. Sticking with index funds is very good advice: * https://ofdollarsanddata.com/why-you-shouldnt-pick-individua... * https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street > After about three decades investing, I can say that more than 95% of my returns are from just a small hand…

> Sticking with index funds is very good advice:

Believe what you like, I'm cool with that.

I have many Wall Street friends who are aligned with your approach, so you are in good company.

My returns over the last 30 years obliterate their returns, because turns out investing in high flying companies will have much better returns than an index fund. You do you.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#423

Post by jjav »

rcxdude wrote: post #287
jjav wrote: post #282

Earlier quoted context omitted.

> Never buy or sell an individual security. This is controversial but very bad advice. No index funds, by their nature, will ever match the return of high-flying company stocks. If you have very little investment capital available, then yes, allocate it all to index funds because you can't afford to narrow it down yet. But as soon as you have some room to invest in individual stocks, do it. After about three decades…

>more than 95% of my returns are from just a small handful of individual stocks Yeah, but did you know which ones from the start? The whole point of index funds or diversification in general is that you don't.

> Yeah, but did you know which ones from the start?

You don't, you can't.

You pick the best ones, many won't give you much return or even a loss, but sometimes you get a 100x. My best return was over 3000x, those are the ones that make up for all the losses.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#424

Post by jjav »

throw0101a wrote: post #327
Ekaros wrote: post #296

Earlier quoted context omitted.

And experiences come from the bulliest of bull markets. Where most people who bet on large sector are winners. Past performance is most likely future performance if things go south...

> And experiences come from the bulliest of bull markets. As someone who has hung out in Reddit's personal finance areas for many years now, the paniced posts of March 2020 and in 2022 were very real. Lots of climbing people down from the ledge during those time periods. Many folks realized that they may be more risk adverse than they thought. (And those were relatively short bursts: if the things had headed down for…

> As someone who has hung out in Reddit's personal finance areas for many years now, the paniced posts of March 2020 and in 2022 were very real.

Those were just minor blips. 2020 was a very short-lived dip of less than 30% and 2022 was a bit more sustained drop of ~35%.

The dot.com bust was an actual legit crash, at almost 85% drop.

I'd suggest at current valuations we need to be prepared for a crash at least as significant as that.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#425

Post by [deleted] »

foxtrot8672 wrote: post #403
dmix wrote: post #5

I use YNAB ( https://www.ynab.com/ ) for budgeting so I already had all of my financial data in a single source. Exporting the CSVs locally and asking Claude to be my financial advisor legitimately gave me good advice. Not just nagging me to save more (which is always useful), but how to organize my budget categories better, detecting longer term spending patterns I wasn't thinking much about, researching credit card…

check out what we're building. this is 100% AI-native financial advice and planning software: https://pendragon.foxtrotcommunications.net/ we always appreciate any feedback

[deleted]

Re: AI financial advice is surprisingly good, especially if you ask right questions

#426

Post by tarsinge »

llamara wrote: post #306
SOLAR_FIELDS wrote: post #38

Earlier quoted context omitted.

If you’re a layman investor just dump all of your shit in index funds. Even if you’re smart and sophisticated, you’re still competing against the massive amount of fraudulent insider trading happening right now with zero enforcement and are trading at a disadvantage as a result

I think you're missing the point why younger people do that. Real wages have been deteriorating over the years. It's much more difficult to afford a house today than it was 50 years ago. People are perfectly aware that investing into index funds is the "correct" approach, however it does not solve anything for them. They're desperate and for them _to gamble_ seems like the only way to become decently rich allowing to…

I’m in Europe, and I have the same sentiment regarding salary. The difference is I’m more than happy with a simple life and experiences that don’t cost too much money. I have free healthcare, plenty of time for social or outdoor activities. Travels and material things are nice, but I feel like young people are forgetting it doesn’t get better than spending time with friends and family and laughing with them or enjoying nature. Whether you makes 50k a year or you are a billionaire it’s the same (not talking about genuinely poor people obviously). Driving a lambo is additional fun, but that’s hardly what makes a day interesting in itself for me, so sometimes I’m not sure what younger people obsessed with getting rich, at least in Europe, are chasing.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#427

Post by foxtrot8672 »

Avshalom wrote: post #46

So if it gives you bad advice it's your fault.

Interesting thought. This is a big reason for we built Pendragon (https://pendragon.foxtrotcommunications.net). We want to help minimize the gaps between sophisticated and normal users. Pendragon gets to know your financial situation and tracks performance over time. It provides consistent advice among various users because it engineers how questions and problems are solved with the AI engine.

We've demonstrated multiple avenues of failure with generic AIs and how we solved them efficiently. You can check our blog for more information.

Essentially. We want to take the failure modes out of the user's hands. Arthur, the AI, is an expert at determining what information is needed to answer a question, storing it, and using it for processing. Our suite of tools ensures the AI remains on track and our philosophy of ephemeral arthur is essential to reducing AI context drift and pollution.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#428

Post by groundzeros2015 »

swat535 wrote: post #400
Pragmata wrote: post #302

Earlier quoted context omitted.

>The problem with giving financial advice to people is that many struggle to pay their rent. If you're struggling to pay rent... Your quality of life is too high and you need to reduce it. Straight up. This isn't a wealth inequality issue, it's a "you're overspending" issue.

> This isn't a wealth inequality issue, it's a "you're overspending" issue. Just so that I understand your position, you think the reason a cashier at McDonald struggles is because he is overspending on his rent? and not due to wealth inequality which causes low wages ?

> wealth inequality which causes low wages

This is a tautology. Low wages are caused by having skills which are in high supply and low demand.

At my local McDonalds you can make 60k/yr. So that sounds like a decent start.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#429

Post by groundzeros2015 »

swat535 wrote: post #399
groundzeros2015 wrote: post #212

Earlier quoted context omitted.

I don’t know what this has to do with financial advisors. People in that situation are not seeking investment advice.

> People in that situation are not seeking investment advice Why do you think poor people often fall into get quick rich schemes? You don't think they are seeking advice?

You just said they don't have enough money for investments. Why would they pay for an advisor?

Can you clarify what you're trying to communicate on the topic of "financial advisors" other than a general class grievance before commenting?

Re: AI financial advice is surprisingly good, especially if you ask right questions

#430

Post by Pragmata »

swat535 wrote: post #400
Pragmata wrote: post #302

Earlier quoted context omitted.

>The problem with giving financial advice to people is that many struggle to pay their rent. If you're struggling to pay rent... Your quality of life is too high and you need to reduce it. Straight up. This isn't a wealth inequality issue, it's a "you're overspending" issue.

> This isn't a wealth inequality issue, it's a "you're overspending" issue. Just so that I understand your position, you think the reason a cashier at McDonald struggles is because he is overspending on his rent? and not due to wealth inequality which causes low wages ?

What other people make has exactly zero bearing on your expenses.

Yes, if a Mcdonalds employee is struggling, it is almost without exception 100% his own fault.

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