Elon Musk has claimed that the present iterations of synthetic intelligence (AI) will surpass people basically mind by the top of 2025. Seven full months earlier than these little chat fashions act like human know-it-alls? I’m sceptical.

However Massive Language Fashions (LLMs) are nonetheless nonetheless enjoyable to mess around with, usually faster at discovering a chunk of information than Google Search, and infrequently provide some fascinating nuggets of fact. With that in thoughts, I set about asking ChatGPT in regards to the prospects of the UK’s premier index, the FTSE 100. 

The query

When will the FTSE 100 attain 10,000?

The reply got here in three elements with various levels of optimism. 

1. Optimistic Case (2-3 years): Outcome: FTSE 100 reaches 10,000 by 2027-28.

2. Reasonable Case (5+ years): Outcome: FTSE 100 hits 10,000 by 2030 or later.

3. Bearish Case (not this decade): Outcome: FTSE 100 struggles to succeed in 10,000 even by 2035.

The final line makes for some grim studying. The prospect of Britain’s premier index nonetheless languishing within the 9,000s a decade from now gained’t be making too many traders comfortable, nor anybody with a stake within the economic system doing effectively both.

Then again, hitting the five-digit mark by 2027 feels like a rosy flip of occasions – that’s a 19% leap over the subsequent two years. 

Appears like we’d like a bit extra context. 

Hey ChatGPT, wish to leap in?

The FTSE 100 “has been historically slower-growing than US indices (like the S&P 500) due to its heavy weighting in energy, financials, and consumer staples, and lower exposure to tech”.

Listed here are some truisms on the state of the index. A lesser-known reality in regards to the UK and US markets is that they’re much extra related than they first seem – it’s actually large tech companies that make such a marked distinction in issues like efficiency and valuation. 

There wasn’t a lot else of curiosity within the response, so it doesn’t sound like I’m going to get something too revelatory out of my bot pal at present. 

What ChatGPT missed

What struck me most about ChatGPT’s insights was extra what it missed, that being dividends. The truth that the FTSE 100 boasts the best common dividend amongst any of the developed markets is one thing that shouldn’t be ignored. That’s as a result of dividend funds don’t enter into the change in price degree. 

Even when the FTSE 100 does keep degree for one more 100 years, traders would nonetheless be scooping up yearly dividends all of the whereas. 

Tesco (LSE: TSCO) shares illustrate this properly. The grocery store is a £24bn large promoting these “consumer staples” ChatGPT talked about we discover lots of on the FTSE 100. Development’s modest at this level. Nobody expects Tesco to develop 10-fold and make an enormous bump in the direction of that 10,000 determine. There are those that would possibly wish to search for different firms with a much less saturated market. 

However a 3.47% dividend drawn from steady revenues may be very enticing for many who need a constant passive earnings from an funding. Its robust branding, sticky Clubcard bonuses and concentrate on buyer expertise make this my favorite inventory in a cut-throat sector.

I personal shares within the large store myself and I’d say that is one for traders to think about.