Image source: Getty Images <\/p>\n
I\u2019ve built a portfolio of mostly FTSE 100 stocks inside a Self-Invested Personal Pension (SIPP) and, mostly, I\u2019m happy with it.<\/p>\n
But now I\u2019m wondering whether it\u2019s fit for purpose. So I asked ChatGPT to produce the \u2018perfect\u2019 blend of mostly dividend income-paying stocks for someone retiring within a decade.<\/p>\n
I\u2019ve learned to approach artificial intelligence (AI) carefully. No investor should use it to select stocks, often the information it comes up with is out of date, with potential risks omitted. Human intelligence is essential.<\/p>\n
ChatGPT assured me I\u2019d asked a \u201cgreat question\u201d. I\u2019ve also learned to take its flattery with a pinch of salt.<\/p>\n
It initially came up with five stocks, when I\u2019d asked for 10. Ho hum. Top of the list was Legal & General Group (LSE: LGEN), which it described as a \u201chigh-yield financial\/insurance business and one of the top dividend payers in the FTSE 100\u201d.<\/p>\n
I can\u2019t argue with its choice, given that I hold it. Today, it has a trailing yield of 9%, which is massive.<\/p>\n
My robot buddy calls it a \u201ccompelling pick\u201d for my SIPP as its business model provides stable cash generation, which supports its generous payout. \u201cThat\u2019s attractive given your goal of income in retirement\u201d, it said.<\/p>\n
At my request, it supplied three risks. First, it warned that high yields can be difficult to fund, especially if earnings drop. Second, insurance businesses are also exposed to long-term liabilities, regulation and market risk. Third, dividend sustainability depends on the group maintaining cash flow, so monitor its financials. All three are totally generic and tell me little.<\/p>\n
It didn\u2019t mention Legal & General\u2019s dismal share price performance. While it\u2019s up 8.4% in the last year, the shares trade slightly lower than 10 years ago. I still think it\u2019s worth considering, for income if not growth.<\/p>\n
ChatGPT then recommended two very similar stocks from the financials sector \u2013 wealth manager M&G and life and retirement insurer Phoenix Group Holdings. Both also offer super-high yields, but in a five-stock portfolio this is way too much concentration. There\u2019s a reason I wouldn\u2019t rely on a Chatbot to plan my future.<\/p>\n
It also highlighted British American Tobacco, which is hard to argue against, given its brilliant long-term track record of supplying income and growth. Then ended with one I\u2019ve never even considered: Foresight Environmental Infrastructure Trust. This is a FTSE 250 investment trust focused on environmental infrastructure with an ultra-high 11% yield. ChatGPT doesn\u2019t mention the shares are down 15% in the last year and 48% over three. Sounds risky to me.<\/p>\n
Five shares isn\u2019t enough for a balanced portfolio, especially since three come from one sector and another is supremely risky. So I asked for five more and it came up with the old favourites \u2013 Shell, Unilever, National Grid, AstraZeneca and Rio Tinto.<\/p>\n
It\u2019s not a bad selection, offering both income and growth, although I\u2019m not a huge fan of Unilever and National Grid.<\/p>\n
ChatGPT doesn\u2019t produce its own ideas, it just scours the internet for information researched by actual humans. Investors should always do their own research. This isn\u2019t a bad portfolio, but I can see more exciting FTSE 100 income stocks out there, while there\u2019s one or two here I just won\u2019t touch.<\/p>\n
The post I asked ChatGPT to build me the perfect SIPP and it suggested\u2026.<\/a> appeared first on The Motley Fool UK<\/a>.<\/p>\n More reading<\/p>\n Harvey Jones has positions in Legal & General Group Plc, M&g Plc, and Phoenix Group Plc. The Motley Fool UK has recommended AstraZeneca Plc, British American Tobacco P.l.c., M&g Plc, National Grid Plc, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.<\/a><\/p>\n Motley Fool UK 2025<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images I\u2019ve built a portfolio of mostly FTSE 100 stocks inside a Self-Invested Personal Pension…\n","protected":false},"author":2,"featured_media":282702,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[733,115372,84,4176,4174,4175,67629,56,54,55],"class_list":{"0":"post-282701","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-artificial-intelligence","9":"tag-balanced-portfolio","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance","14":"tag-sipp","15":"tag-uk","16":"tag-united-kingdom","17":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/282701","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=282701"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/282701\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/282702"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=282701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=282701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=282701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}