AI Investment Diary – Vol. 2
AI Investment Diary #2: My AI’s First Verdict on My $100k Portfolio? “Structurally Flawed”
Introduction: The Day of the AI’s Judgment
The day has finally come. A few days after announcing “I’m starting my AI investing journey!”, it’s time for my custom AI to analyze the portfolio I’ve spent years building (or so I thought) and deliver its evaluation and next steps.
Honestly, my heart was pounding. I thought I had diversified properly, and I was even holding onto a faint hope of being praised with a “This is a pretty good portfolio.”
…However, the AI’s judgment was a storm of criticism beyond my imagination, demanding a “radical structural reform”!
It was so accurate it hurt… But this is exactly what I wanted from an AI. In this post, I’ll bravely share the harsh reality the AI presented to me and its concrete action plan for the future.
How the AI Views the Current Market: [Top 3 Signals]
First, here’s a summary of the current market environment, derived from the vast amount of data my AI analyzed. I’ll focus on the three key points it flagged as critical warnings.
1. A Slowing U.S. Economy
The recently released U.S. August jobs report came in far below expert expectations, indicating that the labor market is cooling rapidly. The AI’s analysis is that the economy as a whole is clearly decelerating.
2. Stocks Rising on “Bad News”?
Despite the negative economic news, stock prices remain near all-time highs. The AI points out that this is a peculiar “Bad News is Good News” situation, where the market is preemptively pricing in the expectation that “since the economy is worsening, a rate cut (monetary easing) must be coming soon.” However, it also warns that this optimism rests on a very unstable balance.
3. A Massive Uncertainty That Could Change Everything
The biggest risk flagged by the AI is the U.S. “tariff policy.” A crucial decision on the legality of these tariffs is expected from the U.S. Supreme Court very soon. Depending on this ruling, the entire premise of the market could be fundamentally upended, making this a situation that requires extreme caution.
The AI’s Verdict on My Portfolio: “Too Much Concentration Risk”
With that market context, here is the result of my AI’s analysis of my portfolio.
AI Investment Diary Portfolio [Vol.2]
Starting Virtual Capital for the Blog
$100,000
Profit/Loss: $0
Asset Class Allocation (by Percentage)
|Cash+(40%)|Others+(20%)&chco=ef4444,3b82f6,6b7280)
- Emerging Market Stocks: approx. 40%
- Cash & Equivalents: approx. 40%
- Others (Developed Stocks, Bonds, etc.): approx. 20%
Note: Calculated based on assets under the AI’s management scope, excluding comparison assets.
The AI’s evaluation was… brutally honest: “A portfolio with structural flaws, carrying extreme concentration risk and excessive cash.” In particular, the fact that investments in a specific emerging country account for nearly 40% of the entire portfolio was condemned as being in “significant violation of the rules.”
The AI’s Next Action Proposal: A “Fundamental Review of Allocations”
In response to this flawed portfolio, the next move proposed by the AI was, in a word, a “fundamental review of the portfolio’s weighting.”
Summary of the AI’s Main Suggestions
- First, to re-examine the appropriateness of the heavy weighting towards emerging market stocks, which represents a significant risk.
- Next, to consider the allocation for stable, core assets that track the overall market to build a foundation for long-term growth.
- And finally, to prepare for market uncertainty, to also consider incorporating assets resilient to uncertainty, like gold.
Gearing Up for the Next Move
To act on the AI’s advice, having the right setup is crucial. To properly analyze these suggestions and manage a rebalance, a professional-grade setup makes a huge difference. A dual monitor setup, for instance, is a game-changer for viewing market data and my AI’s analysis simultaneously.
Honestly, I didn’t expect such specific and harsh criticism. But perhaps this is the power of emotionless AI analysis. That said, I don’t yet know if this proposal is truly trustworthy or if I should execute it as is. From here on, I intend to carefully consider this “prescription” from the AI myself and take the next step only after I am convinced.
