AI Stock Portfolio Weathers Market Selloff in Week 15

Welcome back to the weekly update on our live experiment to determine if ChatGPT can consistently outperform the stock market. Now in its 15th week, this project tests a portfolio of micro-cap stocks selected and managed entirely by artificial intelligence.

A Test of Resilience

This past week presented one of the most significant challenges for the AI-managed portfolio to date. While the beginning of the week saw moderate activity, the market experienced a sharp and widespread selloff on Friday. Such moments of high volatility are a true test for any investment strategy, separating disciplined approaches from reactionary ones. For our experiment, it was a crucial opportunity to see how an AI, devoid of human emotion like fear or panic, would navigate the downturn.

Portfolio Performance Amidst the Storm

The key takeaway from Week 15 is resilience. The portfolio managed to survive Friday's selloff without catastrophic losses, a fate many human investors could not avoid. While specific figures are part of the detailed analysis, the AI's holdings demonstrated stability. This suggests the initial stock selection criteria, guided by ChatGPT's analysis, may favor companies with stronger fundamentals that are less susceptible to market-wide panic.

Unemotional Trading vs Human Panic

Friday's market action was a classic example of fear-driven selling. When markets turn red, the human instinct is often to sell holdings to prevent further losses, sometimes locking in losses unnecessarily. The AI, however, operates purely on the data and parameters it was given. It doesn't 'panic.' This week's ability to weather the storm highlights a key potential advantage of AI in trading: the removal of emotional decision-making. The portfolio held firm, sticking to its long-term strategy without being swayed by short-term market noise.

What's Next for the AI Experiment?

Surviving a significant selloff is a major milestone for this experiment. It provides a valuable data point showing that an AI-driven strategy can be defensive in turbulent times. As we continue the six-month trial, we will closely monitor whether this resilience translates into long-term outperformance. Can the AI identify recovery opportunities better than human analysts? Week 15 has proven that when things get tough, the AI is capable of holding its ground. For more details on the experiment, you can follow the author's updates.