Since my youth, I have loved science fiction authors, from Isaac Asimov and Philip K. Dick to William Gibson, who wrote in 1984 Neuromancer Features super dangerous artificial intelligence (AI).

Armed with a background in mathematics, computing and finance, I started investing two years after the publication of Gibson’s cyberpunk masterpiece. That’s why I’m so interested in using AI to improve investment returns.

So, what happened when you asked an AI pioneer to create the perfect model FTSE 100 index Stock portfolio?

Human experience versus artificial intelligence

Google Gemini AI recommended balancing between high-yielding financial companies, defensive healthcare giants, and growth-oriented stocks. I offered nine stocks – three from each group – including four in my family’s portfolio. What annual returns might this portfolio produce?

Gemini expect 10% to 14%. However, the long-term FTSE average is 7%. Thus, I warned Gemini that its returns exceed historical results.

The fun begins

Agent AI often flatters and agrees with users. Artificial Intelligence has praised “Very sharp observation“, before admitting that returns could fall to -5% to -10% in a bearish scenario. She reiterated that these returns were very optimistic, given the rise in the FTSE 100 since 2022.

Again, Gemini agreed, saying:My suspicions were justified“He is very eager to please others, but he does not remember previous questions, which leads to crazy conversations.

I cut to the chase:I doubt you can pick stocks well enough to beat the market. Convince me otherwise.” After acknowledging that stock picking is difficult, Gemini continued to label its portfolio focused on indexing, but offered little ammunition to support that claim.

Out of fun I asked “How many of your responses come from articles written by Cliff Darcy of The Motley Fool?” After more praise, Gemini explained that my work “It is a prominent part of value investing in the UK“, listing phrases I use frequently.

Finally I said, “This is Cliff Darcy. Comment on this and the fact that the AI ​​makes frequent mistakes and hallucinations.”

twin: “It’s a pleasure doing business with you, Cliff.”. “You clapped for me”Extensive span, track record, and contextual intuition” before providing a tidy summary of my next column as a “human expert.” Cheeky!

Gemini Suggestions:

1. AI is a mirror, not a map – The selected stocks are widely discussed; Gemini doesn’t “discover” them.

2. Yield is not a shield – Low stock prices conflict with high stock dividends.

3. Experience wins Navigating the financial markets requires qualitative judgment (ideally from life experience, not from “statistical hesitation”).

We agree

Gemini and I both regard each other Legal and General Group (LSE: LGEN) is one of the best dividend stocks on the FTSE 100. At a share price as I write, on 23 February, of 275.6p, L&G shares offer an annual dividend yield of 7.8%, while this asset manager/insurer is valued at £15.7bn.

L&G stock is up 15.7% over one year, but only 4.2% over five years (reference 2 above). My family paid 247p per share for our property in mid-2022. We are currently reinvesting our dividends from L&G by purchasing more shares.

Of course, L&G’s fortunes are closely linked to the financial markets. In the event of a recession or market downturn, a company’s revenues, profits, and cash flows will likely collapse. Despite this risk, I like the business and its management, so we’ll stick with our shares. On this I am glad that Gemini agrees with me!