Capstone Sept 30 2026
By Bryce Pease CFP® Accredited Investment Fiduciary® Casey Morris CFP® Capstone Pacific Investment Strategies, Inc. California, Colorado, Nebraska
This is the third article of four about using AI (Artificial Intelligence) for investment advice. AI currently has some very definite flaws and limitations, which is why it shouldn’t be overly-relied on when it comes to finances. In our last article we said: “AI is infamously prone to something called “hallucinations.” This is when a chatbot generates information that is inaccurate or just plain made up. It doesn’t happen all the time, but it does happen enough to make AI less reliable than the average encyclopedia.”
The reason this happens is because of the way AI works. Remember how we said everything a chatbot generates is based on the data it’s trained on? If AI lacks the correct data to answer a question or follow a prompt properly, it will make a “guess” based on the data it does have.
Another reason AI can be an unreliable partner is because it is frequently guilty of making assumptions…and then letting those assumptions affect what it generates. For instance, a study by MIT found that AI often assumes the gender of the person prompting it based on the words they use.(1) Worse still, AI would change its recommendations based on that assumed gender. According to the study: “…advice from prompts written by women led to nearly $60,000 (4.10%) less wealth than advice from prompts by men, largely driven by lower recommended equity exposure and less active rebalancing.”
Which brings me to the most important reason you should not overly rely on AI: AI is superb at providing information; it is not well-suited for giving advice. What’s the difference? Well, the act of “informing” is essentially providing facts and data meant to educate. “Advice,” on the other hand, is a recommendation based on your specific situation. It’s meant not just to increase your knowledge, but to guide your decisions. And this is not yet something AI is very capable of doing. Next time we’ll give examples of when advice can be helpful.
Tonight, Wed. Sept 30, third place winner of the Pioneer Club July 4 Talent Show Jenna Haller will be performing her tap dance routine at the Club opening at 6:30 after supper at 6:00pm. It’s for ages 4 through 17 at First Community Church in Hebron.
Casey and Bryce
Phone: 626-915-7006 or (402) 207-5383
Email: bpease@capstonepacificinc.com
Website: www.capstonepacificinc.com
- “Half of Americans now ask AI for financial advice, but how good is it?” MIT Sloan School of Management, https://mitsloan.mit.edu/press/half-americans-now-ask-ai-financial-advice-how-good-it
