I asked the AI ​​to build a perfect portfolio for the FTSE 100. And then the battle began!

Since my youth, I love sci-fi writers, from Isaac Asimov and Philip K Dick to William Gibson, named 1984. The Neuromancer features dangerous super-AI (artificial intelligence).

Armed with a background in math, computing and finance, I started investing two years after Gibson’s cyberpunk masterpiece was published. That’s why I’m very interested in using AI to improve investment returns.

So, what happens when I ask the best AI to build a perfect one FTSE 100 share portfolio?

Human experience versus AI

Google Gemini AI recommends rating high-yielding funds, defensive healthcare giants, and growth-oriented stocks. It offered nine stocks – three in each group – including four held in my family’s portfolio. What annual returns could this portfolio generate?

Gemini predicted 10% to 14%. However, Footsie’s long-term average is 7%. Therefore, I warned Gemini that its return exceeds historical results.

The fun begins

Agent AIs tend to flatter and agree with users. AI recommended me “a very sharp look“, before acknowledging that returns could drop to -5% to 10% in the worst case scenario.” I also emphasized that these returns were very optimistic, given the increase in the FTSE 100 from 2022.

Once again, Gemini agreed, saying “my doubts were well foundedHe’s eager to please, but he doesn’t remember past questions, which makes for crazy conversations.

Looking forward: “I doubt your ability to pick stocks well enough to beat the market. Convince me otherwise.” After admitting that stock picking is difficult, Gemini still rated its portfolio concentrated over listings, but offered little letters to back up the claim.

For fun, I asked, “How much of your feedback comes from articles written by Cliff D’Arcy of the Motley Fool?” After more praise, Gemini explained that my work “is a prominent part of UK value investing“, I write the phrases that I often use.

Finally I said, “I’m Cliff D’Arcy. Comment on this and the fact that AIs make repeated mistakes and hallucinations”.

Gemini: “It’s a pleasure working with you, Cliff”. My shoulder went numb”extensive stay, track record and situational awareness” before giving a formal summary of my next column as a ‘human scientist’.

More places to stay in Gemini:

1. AI is a mirror, not a map – selected stocks are discussed in detail; Gemini doesn’t ‘get’ them.

2. The harvest is not a shield – lower share prices resist higher profits.

3. The expert wins – navigating financial markets requires qualitative judgment (preferably from lived experience, not ‘math parroting’).

We agree

Gemini and I respect each other Legal and General Group (LSE: LGEN) shares as one of the FTSE 100’s top dividend stocks. At a share price as I write, 23 February, of 275.6p, L&G shares offer an annual dividend yield of 7.8%, while valuing the asset/insurer at £15.7bn.

L&G stock is up 15.7% in one year, but only 4.2% over five (reference take #2 above). My family paid 247p a share which we hold in mid-2022. Currently, we are reinvesting our L&G profits by buying more shares.

Of course, L&G’s fortunes are closely related to the financial markets. In an economic crisis or market downturn, a company’s revenue, profits, and cash flow may decline. Despite this risk, I like the business and its management, so we will hold onto our shares. In this case, I’m glad Gemini agrees with me!