The Rise of the AI Investor: Singapore’s Young Generation Takes the Leap
Singapore’s young investors are increasingly turning to artificial intelligence (AI) tools like ChatGPT and Perplexity Finance to navigate the complexities of the market. This trend, highlighted by recent reports, signals a shift in how a new generation approaches investing, but also raises important questions about risk management and financial literacy.
AI as a Launchpad: Research and Portfolio Construction
For many, AI isn’t replacing traditional financial advice, but rather serving as a powerful starting point for research. Ms. Ye Jia’En, a student at Nanyang Technological University (NTU), uses ChatGPT to break down complex financial concepts and gain a basic understanding of potential investments. She currently invests in US dollar-denominated exchange-traded funds (ETFs), including Invesco’s Nasdaq 100 ETF, Vanguard FTSE All-World UCITS ETF USD Accumulation and iShares Core S&P 500 UCITS ETF (USD) Accumulating.
Others, like Mr. Ian Choi, a first-year NTU student, are using AI to summarise company financial reports and model potential returns, while still consulting with a financial advisor. This hybrid approach allows them to leverage AI’s efficiency while benefiting from professional guidance.
The Appeal of Control and Accessibility
A key driver of this trend is the desire for greater control over investment decisions. Mr. Chern Yeh Jou, an NTU student, values the flexibility and control offered by independent investing, avoiding the potential restrictions and penalties associated with traditional financial advisors. His portfolio, which includes Taiwan Semiconductor Manufacturing Company, Google, Microsoft and Nvidia, has seen significant returns.
Navigating Volatility: Lessons Learned in 2026
The current market environment, characterized by volatility – including events like the Greenland crisis and AI-led tech sell-offs – presents a unique challenge for AI-assisted investing. The S&P 500 has experienced sharp swings in 2026, with intra-week moves of 1-2%, despite remaining relatively stable year-to-date.
Mr. Jadon Ching, a Singapore Management University student, experienced a 20% portfolio loss in January due to technology stock sell-offs and a drop in Bitcoin, despite earlier gains of 29% in 2025. This experience underscored the importance of risk management, specifically employing dollar-cost averaging to mitigate potential losses.
The Risks of Overconfidence and “Black Box” Advice
Industry experts caution against overreliance on AI, particularly without a solid foundation in financial literacy. Morningstar’s Nick Cheung warns that AI-generated advice, presented confidently, may not reveal the full picture or account for individual financial goals and risk tolerance. The potential for AI to reinforce poor decision-making is a concern, as it can oversimplify complex situations.
Some investors, like Mr. Liew En Jie, remain skeptical of AI’s ability to account for unquantifiable factors. He prefers a strategy focused on broad-based ETFs and carefully selected stocks based on fundamental analysis.
Perplexity vs. ChatGPT: A Closer Appear
While both ChatGPT and Perplexity are gaining traction, they differ in their approach. Perplexity AI excels at real-time information retrieval, citing sources and providing up-to-date responses. ChatGPT, relies on a static knowledge base. This distinction is crucial for investors needing the latest market data.
The Future of AI in Investing: A Balanced Approach
The consensus among industry observers is that AI is a valuable tool, but not a replacement for human expertise. OCBC Bank’s Timothy Liew emphasizes the importance of using AI “smartly” as part of a balanced and informed investment strategy. AI can enhance information gathering and decision-making, but human financial advice remains essential for aligning portfolios with individual goals and risk profiles.
Did you know?
AI tools can help investors quickly analyze vast amounts of data, but they cannot replace the critical thinking and emotional intelligence required to navigate market volatility.
FAQ
Q: Is AI investing suitable for beginners?
A: AI can be a helpful tool for beginners, but it’s crucial to combine it with financial education and, ideally, guidance from a financial advisor.
Q: What are the main risks of using AI for investing?
A: Overreliance on AI, lack of financial literacy, and the potential for AI to reinforce poor decision-making are key risks.
Q: Which AI tool is better for investing, ChatGPT or Perplexity?
A: Perplexity AI is generally preferred for its real-time information retrieval capabilities, while ChatGPT is more versatile for general conversational tasks.
Q: Can AI predict market crashes?
A: No. AI relies on historical data and pattern recognition, which may not hold true during unprecedented events or periods of high volatility.
Q: Should I replace my financial advisor with AI?
A: Not necessarily. A hybrid approach, combining AI tools with human financial advice, is often the most effective strategy.
Pro Tip: Always verify information provided by AI tools with independent sources before making any investment decisions.
Want to learn more about navigating the evolving world of finance? Explore our other articles on investment strategies and risk management.
