More young S’pore investors turn to AI for stock picks, but experts warn of risks in volatile market

SINGAPORE - Unfazed by recent market volatility, young investors in Singapore are increasingly turning to artificial intelligence tools such as ChatGPT and Perplexity Finance to analyse markets and refine their portfolios.

The trend comes even as markets remain choppy, raising questions about whether AI-assisted investing can hold up even when historical patterns break down. 

This is as young investors may not have the experience to interpret AI-generated insights during periods of heightened volatility, warned analysts.

For example, the benchmark S&P 500 has swung sharply in 2026, with flashpoints such as the Greenland crisis and the periodic AI-led tech sell-offs sending stocks sharply lower before making a recovery.

Rapid shifts in rate expectations, trade tensions and sector rotation have led to sharp intra-week moves of between 1 per cent and 2 per cent, even as the index’s year-to-date level remains close to where it began in the 6,800s. 

Such turbulence complicates data-driven investing. Analysts warned that confident-sounding outputs may mask important nuances or risks.

“Advice presented in an easy-to-understand way and expressed with strong conviction may not present the full picture,” said Morningstar managing director and head for Greater China Nick Cheung.

Why young investors love AI

Despite the risks, the lure of AI tools that offer a fast, easy and low-cost way to navigate complicated financial information is hard to resist.

“AI allows me to control the information that I want to see based on my prompts,” said Mr Jadon Ching, a third-year Singapore Management University student.

Mr Ching’s portfolio consists of semiconductor stock Intel, metal stock Cameco, healthcare stock Hims & Hers, technology stock CoreWeave and cryptocurrency Ethereum. 

While he saw returns of 29 per cent at end-2025, his portfolio suffered losses of 20 per cent by the end of January due to technology stock sell-offs and Bitcoin’s drop of about 11 per cent. 

The experience reinforced the need for risk management.

“For mitigating losses, keep positions small and buy in small amounts, so that when it drops you can add more,” he said, referring to dollar-cost averaging as a key strategy.

Ms Ye Jia’En, a third-year student from Nanyang Technological University (NTU), uses ChatGPT as a starting point for research. She currently invests in US dollar-denominated exchange-traded funds (ETFs) and began in September 2025.

“Generative AI can help as a launch pad to help young investors like me to break down difficult concepts into digestible chunks, and help provide a basic overview of stocks that I’m able to read at a glance,” Ms Ye said.

Her holdings include Invesco’s Nasdaq 100 ETF, Vanguard FTSE All-World UCITS ETF USD Accumulation and iShares Core S&P 500 UCITS ETF (USD) Accumulating.

Since she started investing, her portfolio has returned about 4 per cent, with gains from 2025’s equity momentum partially offset by a choppier 2026.

Paired with the accessibility of digital brokerage platforms, AI tools are increasingly seen as an alternative to traditional financial advisers.

Mr Chern Yeh Jou, a fourth-year NTU student who uses brokerage platform Tiger Brokers and occasionally makes use of AI to make company comparisons, said that independently investing gives him “flexibility and control over his money”. 

“If I invest through FAs (financial advisers), it might take very long just to withdraw my money, and most of the time, there is a penalty for doing so. I don’t want to subject myself to such restrictions unnecessarily,” Mr Chern added.

Since 2022, his portfolio – which includes Taiwan Semiconductor Manufacturing Company, Google, Microsoft and Nvidia – has returned 227 per cent, driven largely by the tech rally. 

Risks of overconfidence

Industry observers caution that easier access to markets without financial literacy can foster overconfidence, especially when amplified by AI tools.

“Without a clear strategy, some investors end up chasing trends, overtrading, or taking on risks that don’t align with their financial goals or time horizon,” said Mr Nicholas Low, financial advisory manager at Finance Alliance. 

Volatile markets can exacerbate these tendencies. Relying on AI models that use historical data pattern recognition for stock picks can be risky when “patterns stop working”, said Morningstar’s Mr Cheung. “AI can unintentionally reinforce poor decision-making because it’s too good at making the complex simple,” he added.

Some young investors remain wary of using AI at all.

“I don’t believe AI is currently capable of analysing many considerations. Important information is sometimes unquantifiable,” said Mr Liew En Jie, a first-year student from the National University of Singapore (NUS) who has not used AI in his investing journey.

Mr Liew’s portfolio consists of ETFs like the Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF, selected “magnificent seven” stocks, and aerospace and defence counters. He has seen returns of 48.3 per cent since January 2024.

He chose broad-based ETFs for steady growth and easy diversification, and aerospace and defence stocks appeal to him amid rising global tensions that fuel government spending in these sectors.

Others prefer a hybrid approach.

Mr Ian Choi, a first-year NTU student, uses AI to summarise company financial reports and model potential returns for investments, but still consults a financial adviser.

“I am comfortable having an aggressive portfolio because I have a financial adviser to rationalise stock picking and to assuage my retail investor panics,” Mr Choi said.

He has both a dividend portfolio and a professionally managed portfolio.

The former is focused on Singapore stocks from DBS Bank, real estate investment trusts and Singapore Savings Bonds, which have delivered returns of 27.5 per cent since July 2022.

His managed portfolio, which is tilted towards Chinese growth funds, global technology and US multicap funds, has returned 3.3 per cent since November 2020. 

Human judgment still counts

Depending on AI alone can be risky, but using it with human insight can better investment outcomes, said analysts.

“AI can broaden access to information, improve efficiency of gathering information and enhance decision-making, but human financial advice remains important in helping investors align their portfolios with their goals, risk appetite and life stage,” said Mr Timothy Liew, head of investments at OCBC Bank.

“It is about using AI smartly, not blindly, as part of a balanced and informed investment strategy.”

THE BUSINESS TIMES