AI Investing for Dummies (Paul Mladjenovic) (Z-Library)

AI Investing by Paul Mladjenovic

AI Investing For Dummies® Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com Copyright © 2024 by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/ go/permissions. Trademarks: Wiley, For Dummies, the Dummies Man logo, Dummies.com, Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc. is not associated with any product or vendor mentioned in this book. LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: WHILE THE PUBLISHER AND AUTHORS HAVE USED THEIR BEST EFFORTS IN PREPARING THIS WORK, THEY MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES REPRESENTATIVES, WRITTEN SALES MATERIALS OR PROMOTIONAL STATEMENTS FOR THIS WORK. THE FACT THAT AN ORGANIZATION, WEBSITE, OR PRODUCT IS REFERRED TO IN THIS WORK AS A CITATION AND/OR POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE PUBLISHER AND AUTHORS ENDORSE THE INFORMATION OR SERVICES THE ORGANIZATION, WEBSITE, OR PRODUCT MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING PROFESSIONAL SERVICES. THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR YOUR SITUATION. YOU SHOULD CONSULT WITH A SPECIALIST WHERE APPROPRIATE. FURTHER, READERS SHOULD BE AWARE THAT WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ. NEITHER THE PUBLISHER NOR AUTHORS SHALL BE LIABLE FOR ANY LOSS OF PROFIT OR ANY OTHER COMMERCIAL DAMAGES, INCLUDING BUT NOT LIMITED TO SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR OTHER DAMAGES. For general information on our other products and services, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002. For technical support, please visit https://hub.wiley.com/community/support/dummies. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Library of Congress Control Number: 2024930804 ISBN 978-1-394-23703-6 (pbk); ISBN 978-1-394-23704-3 (ebk); ISBN 978-1-394-23705-0 (ebk)

Contents at a Glance Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Part 1: Artificial Intelligence Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 CHAPTER 1: Artificial Intelligence 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 CHAPTER 2: A Primer on ChatGPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 CHAPTER 3: Spanning the AI Landscape: Different Inputs and Outputs . . . . . . . . . . . 23 Part 2: AI Stock Investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 CHAPTER 4: Large-Cap AI Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 CHAPTER 5: Small-Cap AI Stocks and IPOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 CHAPTER 6: Diversifying with ETFs and Mutual Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 51 CHAPTER 7: Robo-Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 CHAPTER 8: Fundamental and Technical Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Part 3: AI Stock Investing Alternatives . . . . . . . . . . . . . . . . . . . . . . . . 85 CHAPTER 9: Hard Assets and Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 CHAPTER 10: Bonds, Bank Investments, and Digital Currencies . . . . . . . . . . . . . . . . . 109 CHAPTER 11: Real Estate Investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 CHAPTER 12: Business and Career Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Part 4: Smart Investment Tactics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 CHAPTER 13: Using AI for Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 CHAPTER 14: Financial Planning and Other Money Matters . . . . . . . . . . . . . . . . . . . . . 181 CHAPTER 15: Retirement and Estate Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 CHAPTER 16: Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Part 5: The Part of Tens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 CHAPTER 17: Ten Cautions about Artificial Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . 229 CHAPTER 18: Ten or So Types of Prompts You Can Use for AI Investing . . . . . . . . . . 235 CHAPTER 19: Ten Tools and Resources That AI Beginners Should Consider . . . . . . . 243 CHAPTER 20: Ten Strategies to Complement Your AI Investing Pursuits . . . . . . . . . . 249 Part 6: Appendixes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 APPENDIX A: AI Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 APPENDIX B: AI Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 APPENDIX C: General Investing Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275

Table of Contents v Table of Contents INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 About This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Foolish Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Icons Used in This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Beyond the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Where to Go from Here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 PART 1: ARTIFICIAL INTELLIGENCE BASICS . . . . . . . . . . . . . . . . . . . 5 CHAPTER 1: Artificial Intelligence 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 First Things First: What Is AI? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Distinguishing the Two Types of AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 General AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Specific AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Investing in Stocks with AI’s Help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Using AI to Try Stock Investing Alternatives . . . . . . . . . . . . . . . . . . . . . .10 Looking at Your Total Financial Picture with AI . . . . . . . . . . . . . . . . . . . .11 Getting Smart about AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 CHAPTER 2: A Primer on ChatGPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Acquainting Yourself with ChatGPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Asking ChatGPT to describe itself . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Discovering what ChatGPT can help you with . . . . . . . . . . . . . . . . . .14 It’s All About the Prompt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 The Limits and Negatives of ChatGPT . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Looking at ChatGPT Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 CHAPTER 3: Spanning the AI Landscape: Different Inputs and Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 First Things First: Text-to-Text with Chatbots . . . . . . . . . . . . . . . . . . . . .24 Other AI Inputs and Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Document-to-text . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Audio-to-text . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Text-to-image . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Text-to-video . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Finding Even More Tools with a Few Helpful Resources . . . . . . . . . . . .27

vi AI Investing For Dummies PART 2: AI STOCK INVESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 CHAPTER 4: Large-Cap AI Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Getting a Sense of AI’s Place in the Big Picture . . . . . . . . . . . . . . . . . . . .32 Understanding Market Capitalization Basics . . . . . . . . . . . . . . . . . . . . . .33 AI Companies: The Major Players . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Checking Out the Pros and Cons of AI Stocks for Investors . . . . . . . . .36 The pros . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 The cons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 The Indirect Way to AI Profits: Investing in Impacted Companies . . . .38 Using AI to Analyze Large-Cap Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Doing a SWOT analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Summarizing financial data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 CHAPTER 5: Small-Cap AI Stocks and IPOs . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Beginning with the Basics of Small-Cap Stocks . . . . . . . . . . . . . . . . . . . .44 Finding AI-Related Small-Cap Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Choosing Small-Cap AI Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46 Introducing IPOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Surveying Safety and Hedging Strategies for Small Caps and IPOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Stop-loss orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Trailing stops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Option strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 CHAPTER 6: Diversifying with ETFs and Mutual Funds . . . . . . . . . . . 51 Comparing ETFs and Mutual Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Something in common: Diversification . . . . . . . . . . . . . . . . . . . . . . .52 Static portfolios versus actively managed portfolios . . . . . . . . . . . .52 Shares versus cash purchases and sales . . . . . . . . . . . . . . . . . . . . . .53 Looking at the Pros and Cons of ETFs and Mutual Funds with AI’s Help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54 ETFs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54 Mutual funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56 Noting Some Top AI-Related ETFs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58 Researching ETFs with AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Focusing on AI-Related Mutual Funds . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Reviewing Resources for Investing in ETFs and Mutual Funds . . . . . . .63 CHAPTER 7: Robo-Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Defining What a Robo-Advisor Does . . . . . . . . . . . . . . . . . . . . . . . . . . . .65 Debating the Pros and Cons of Robo-Advisors . . . . . . . . . . . . . . . . . . . .67 Digging into Robo-Advisors’ Main Features . . . . . . . . . . . . . . . . . . . . . . .69 The Bottom Line: Choosing a Human Advisor or a Robo-Advisor . . . .72 Listing a Few Top Robo-Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73

Table of Contents vii CHAPTER 8: Fundamental and Technical Analysis . . . . . . . . . . . . . . . . 75 Fundamental Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76 Key fundamental factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76 Fundamental analysis and AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Technical Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80 A spotlight on RSI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80 Technical analysis and AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81 PART 3: AI STOCK INVESTING ALTERNATIVES . . . . . . . . . . . . . . 85 CHAPTER 9: Hard Assets and Commodities . . . . . . . . . . . . . . . . . . . . . . . . 87 Understanding Investing versus Speculating . . . . . . . . . . . . . . . . . . . . .88 Comparing the Risks of Precious Metals and Commodities . . . . . . . . .89 What precious metals don’t have: Counterparty risk . . . . . . . . . . . .89 Other risks associated with stocks and other conventional vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91 Risks with precious metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91 Risks with commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93 Handling Hard Assets (Primarily Precious Metals) . . . . . . . . . . . . . . . . .96 Ways to invest in gold and silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96 AI strategies and precious metals . . . . . . . . . . . . . . . . . . . . . . . . . . . .97 Precious metals resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98 Considering Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98 Comparing commodities and futures . . . . . . . . . . . . . . . . . . . . . . . .99 Looking at different types of commodities . . . . . . . . . . . . . . . . . . .101 Checking out commodities investing vehicles . . . . . . . . . . . . . . . . .105 Using AI to get the scoop on commodities . . . . . . . . . . . . . . . . . . .106 Reviewing resources on commodities . . . . . . . . . . . . . . . . . . . . . . .107 CHAPTER 10: Bonds, Bank Investments, and Digital Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Bonds and Bank Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110 Bank investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113 Cryptocurrencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114 Central Bank Digital Currencies (CBDCs) . . . . . . . . . . . . . . . . . . . . . . . .116 CHAPTER 11: Real Estate Investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Knowing Whether You Have What It Takes to Be a Real Estate Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123 Noting Two Major Real Estate Considerations . . . . . . . . . . . . . . . . . . .125 Getting into Direct Real Estate Investing . . . . . . . . . . . . . . . . . . . . . . . .126 Investing Indirectly in Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .129 Trying Real Estate Investment Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . .131

viii AI Investing For Dummies Examining Real Estate ETFs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 Checking Out Additional Strategies for AI Real Estate Investing Prompts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137 Consulting Real Estate Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138 CHAPTER 12: Business and Career Ventures . . . . . . . . . . . . . . . . . . . . . . . 139 Understanding the Benefits of Having Your Own Business . . . . . . . .140 Earning income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140 Enjoying tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140 Having fun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140 Building wealth with your own retirement account . . . . . . . . . . . .141 Selling your business for big money . . . . . . . . . . . . . . . . . . . . . . . . .142 Starting a Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .142 Doing some research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .142 Putting together pieces of a business plan . . . . . . . . . . . . . . . . . . .143 Funding your business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145 Steering your start-up with the help of AI . . . . . . . . . . . . . . . . . . . .146 Running Your Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147 Getting help with your current software . . . . . . . . . . . . . . . . . . . . .147 Writing a variety of content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148 Generating images . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149 Seeing other ways that AI can help you run your business . . . . . .149 Using AI to Boost Your Career . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152 Discovering the best jobs for your skills and experience . . . . . . .152 Finding advice for your current job . . . . . . . . . . . . . . . . . . . . . . . . . .153 Researching new job opportunities . . . . . . . . . . . . . . . . . . . . . . . . .154 Creating a winning resume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .156 Honing your interviewing skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157 PART 4: SMART INVESTMENT TACTICS . . . . . . . . . . . . . . . . . . . . . . 159 CHAPTER 13: Using AI for Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . 161 Gross Domestic Product (GDP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161 Defining GDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162 Delving into the details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164 The Labor Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167 Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .169 Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170 Leading Economic Indicators (LEI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174 Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175 The Federal Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176 The role of the “Fed” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176 The “Fed” as an investor resource . . . . . . . . . . . . . . . . . . . . . . . . . . .178 The Political Landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .178

Table of Contents ix CHAPTER 14: Financial Planning and Other Money Matters . . . . 181 Walking through the Steps of Financial Planning . . . . . . . . . . . . . . . . .182 Getting a Handle on Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .186 Spotlighting College Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .189 CHAPTER 15: Retirement and Estate Planning . . . . . . . . . . . . . . . . . . . . . 193 Digging into Retirement Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .193 Your starting point: A personal balance sheet . . . . . . . . . . . . . . . .194 The “5–10 approach” and a reality check . . . . . . . . . . . . . . . . . . . . .196 A helpful checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .199 Even more AI retirement planning prompts . . . . . . . . . . . . . . . . . .201 Thinking about Estate Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203 Defining “estate planning” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .204 Beginning the estate planning process . . . . . . . . . . . . . . . . . . . . . .204 CHAPTER 16: Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Reviewing the Tax Treatment of Different Investments . . . . . . . . . . .210 Understanding ordinary income and capital gains . . . . . . . . . . . .210 Determining your best timing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .211 Looking at a capital gains example . . . . . . . . . . . . . . . . . . . . . . . . . .212 Minimizing capital gains taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .213 Cutting taxes with capital losses . . . . . . . . . . . . . . . . . . . . . . . . . . . .214 Evaluating gain and loss scenarios . . . . . . . . . . . . . . . . . . . . . . . . . .214 Sharing with the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .215 Tax forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .216 The wash-sale rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .216 Looking at Tax Deductions for Investors . . . . . . . . . . . . . . . . . . . . . . . .217 Investment interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218 Foreign taxes on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218 Miscellaneous expenses (on Schedule A) . . . . . . . . . . . . . . . . . . . .218 The donation of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .219 Nondeductible items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .220 Getting Tax Benefits with Retirement Accounts . . . . . . . . . . . . . . . . . .220 IRAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .220 401(k) plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .222 Checking Out AI Tax Tactics and Strategies . . . . . . . . . . . . . . . . . . . . . .222 Tapping into Tax Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .223 IRS publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .223 AI tax tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .224 Tax sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .224 Tax software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225 Tax resources from yours truly . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225

x AI Investing For Dummies PART 5: THE PART OF TENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 CHAPTER 17: Ten Cautions about Artificial Intelligence . . . . . . . . . . 229 Inaccuracy and Errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .229 Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .230 Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231 Job Displacement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231 Overreliance on Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232 Information versus Wisdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232 Use of the Right AI Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232 Your Input versus AI Output . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .233 Faulty Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .233 Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .234 CHAPTER 18: Ten or So Types of Prompts You Can Use for AI Investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Simple Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .236 Complex Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .236 Personal Scenarios with Goals in Mind . . . . . . . . . . . . . . . . . . . . . . . . .237 Formulas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .237 Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .237 Second Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .238 Pros and Cons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .238 Comparisons of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Prompts in Different Languages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Prompts at a Basic Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241 Document Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241 CHAPTER 19: Ten Tools and Resources That AI Beginners Should Consider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 OpenAI.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .243 Investopedia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244 ToolsAI.net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245 YouTube AI Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245 LinkedIn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245 AI Productivity Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .246 Bedrock AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .246 Your Brokerage Site’s Robo-Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . .246 Udemy and Other Online Courses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .247 Discord and Other Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .247

Table of Contents xi CHAPTER 20: Ten Strategies to Complement Your AI Investing Pursuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Focusing on Fundamentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .249 Investing in Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .250 Investing in Consumer Staples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .250 Investing in Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .251 Considering Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .251 Limiting Your Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .251 Choosing the Right Savings Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .252 Diversifying with Hard Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .253 Personal Preparedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .254 Keeping a Paper Trail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .254 PART 6: APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 APPENDIX A: AI Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 Beginners’ Tutorials and Courses on AI . . . . . . . . . . . . . . . . . . . . . . . . .259 AI YouTube Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .260 Books on AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .261 AI News and Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .261 AI E-Zines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .262 AI Resource Compilations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .262 User Groups about AI and ChatGPT . . . . . . . . . . . . . . . . . . . . . . . . . . . .263 APPENDIX B: AI Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Investing AI Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .265 Personal Finance AI Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .266 Tax and Budgeting AI Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .266 Robo-Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .267 ChatGPT Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .268 Directories of AI Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .268 Other Finance-Specific Tools Using Generative AI . . . . . . . . . . . . . . . .269 APPENDIX C: General Investing Resources . . . . . . . . . . . . . . . . . . . . . . . . . 271 General Investing Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .271 Specialized Investing Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272 Investing Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272 LinkedIn Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .273 Investor Clubs and Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .274 Government Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .274 INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275

Introduction 1 Introduction Artificial intelligence (AI) has taken the world by storm, and what better umbrella than a For Dummies guide? This book offers friendly and concrete guidance to either the newbie to AI or the intermediate investor, who is also interested in how this dynamic and soon-to-be pervasive topic affects you financially. That may mean investing and wealth-building or related issues rang- ing from retirement planning to estate planning and college planning. I also cover a wealth of practical resources, strategies, and tools to make sure you’re ahead of the pack. About This Book AI investing is generally new to the public, and it can be valuable to anyone man- aging an investment portfolio or who needs information to achieve financial goals, especially with stocks and stock-related funds. This book is laid out so you can go from “What are AI prompts?” to how to use them and which ones work best in varying investing situations. The first few chapters of this book go into the basics of AI, including its risks and rewards. Later parts go into the panorama of investing and financial topics that AI can help you with. The book doesn’t just stop at AI stock investing  — it goes deeper since AI affects so much in the world of investing, business, and general finance. No matter what your money concern is, this book has what you need to know written in an easy-to-digest and practical way. Take a close look at the appendixes because this is the secret treasure of this book. Because AI is changing so quickly, you need to know where to look to keep up, and Part 6 is rich in how-to and where-to resources, educational and otherwise. A quick note: Sidebars (shaded boxes of text) dig into the details of a given topic, but they aren’t crucial to understanding it. Feel free to read them or skip them. You can pass over the text accompanied by the Technical Stuff icon, too. The text marked with this icon gives some interesting but nonessential information about AI investing.

2 AI Investing For Dummies One last thing: Within this book, you may note that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply key in the web address exactly as it’s noted in the text, pretending as though the line break doesn’t exist. If you’re reading this as an e-book, you’ve got it easy — just click the web address to be taken directly to the web page. Foolish Assumptions In writing this book, I imagined someone pulling a copy off a bookshelf in their local bookstore and scanning it to see whether it’s a valuable guide. And I won- dered what that person would need to know to find this book interesting. Here are some of the assumptions I came up with about you, the reader: » You have an interest in artificial intelligence and how it affects you financially. » You’re a consumer or investor and seeking guidance on how AI can increase your prosperity. » You’re worried about AI and how it affects your job or business, and you want to know what to do and how to proceed in this exciting, yet scary, new area. » You want a convenient source of guidance on resources for the fast-paced world of AI technology. Icons Used in This Book In the margins of the book, you’ll find these icons helping you out. Whenever I provide a hint that makes an aspect of AI investing easier or poten- tially more successful, I mark it with a Tip icon. The Remember icon marks paragraphs that contain information that you should absolutely take away from this book. Heed the paragraphs marked with the Warning icon to avoid potential AI investing disasters.

Introduction 3 Whenever I get technically inclined, I mark the paragraph with a Technical Stuff icon. If you’re not into the nitty-gritty technical details of AI investing, you can skip these nuggets of info. Beyond the Book In addition to the material in the print or e-book you’re reading right now, this product comes with some access-anywhere goodies on the web. Check out the free Cheat Sheet for info on ways that AI can help you save money and much more. To get this Cheat Sheet, simply go to www.dummies.com and search for “AI Investing For Dummies Cheat Sheet” in the Search box. Where to Go from Here This book is designed so that you can quickly jump to a specific chapter or section that most interests you. You don’t have to start with the first chapter — although if you’re new to AI and related investment issues, I recommend that you do so. Understanding the foundation of AI investing helps you better apply the tech- niques that you discover in the later chapters on the specifics of your investment activity. You don’t have to read this book from cover to cover, but if you’re an especially thorough person, feel free to do so! If you just want to find specific information and then get back to work, take a look at the table of contents or the index, and then dive into the chapter or section that interests you. Besides investing and financial issues with AI, I especially suggest that you also review the business and career AI-related information so that you keep up with the professional challenges and opportunities that are unfolding with AI right now. Keep in mind that success in any endeavor is initially reliant on sound informa- tion and guidance, and a For Dummies guide is there for you right from the start. AI Investing For Dummies will help you forge ahead successfully on your AI-driven path to a brighter future.

1Artificial Intelligence Basics

IN THIS PART . . . Discover what artificial intelligence is and check out some common AI tools. Get a primer on ChatGPT, the biggest AI tool out there. Look at its features and uses. Take stock of the risks and rewards of AI.