Presentation by Prof. Hornuf at the COSMO WISSENSCHAFTS­FORUM at the Kulturpalast

On January 24, 2024, Prof. Lars Hornuf gave a lecture to an interested audience from business and society as part of the COSMO WISSENSCHAFTSFORUM. The lecture at the Kulturpalast Dresden was entitled "Artificial intelligence for retirement provision". In his lecture, Professor Hornuf presented the results of a current research project on the performance of investment recommendations from GPT-4, after briefly explaining the basics of portfolio theory.

Prof. Hornuf explained the areas in which artificial intelligence can potentially help retail investors. At the same time, however, Prof. Hornuf also pointed out that AI tends to favor domestic investments (home bias). A comparison between a professional robo advisor and GPT-4 showed that in most cases, portfolios suggested by GPT achieve an equivalent or even slightly higher return than the portfolios recommended by a robo advisor. On a risk-adjusted basis, however, the results were almost identical. After the presentation, the audience discussed, among other things, the extent to which home bias actually plays a role and how the results would differ depending on the prompt.

The presentation was largely based on the working paper "Using GPT-4 for Financial Advice", which Prof. Hornuf published together with Prof. Christian Fieberg (Bremen University of Applied Sciences) and Prof. David Streich (Catholic University of Eichstätt-Ingolstadt). The paper can be downloaded free of charge here.