Gen Z is trading stocks, investing in MFs using AI—but can it replace human judgement? Experts explain

Experts highlight risks young investors should consider when using AI for investment decisions.

Artificial intelligence is emerging as a powerful research tool for Gen Z investors looking to invest in stocks, mutual funds and systematic investment plans (SIPs). However, experts caution that AI should complement—not replace—investor judgement, discipline and sound financial planning.

One Gen Z investor, for instance, used an AI tool to analyse his portfolio. Although he already owned a Flexi Cap Fund, the tool recommended another fund in the same category without adequately accounting for portfolio overlap.

This highlights some of the risks young investors need to consider when using AI for investment decisions.

AI can provide information, but investors need to verify it

Amitha A. Jayan, Wealth Manager at Scripbox, said: “AI summarises vast information, but fund NAVs, expense ratios, or financial metrics can occasionally be outdated. Double-check details on official platforms before committing. AI outputs are naturally generic. Every choice must match your specific risk capacity, tax bracket, time horizon, and short-term liquidity needs.”

“Algorithms tracking online sentiment can lean toward volatile or viral assets. True wealth creation comes from patient, long-term asset allocation,” Jayan added.

AI can process large volumes of information quickly, but investors still need to assess whether the information is relevant to their own financial circumstances.

Ashwiinii Deshpande (NFP Member), Director at Hitachintak Investservices, said: “AI can calculate, but experience decides which variables and weights are appropriate. It can also miss information we never provide.”

Personal circumstances still matter

An investor may have a stable income today, but an unexpected financial emergency or future family responsibilities could significantly change their investment requirements. Such factors need to be considered when deciding the appropriate asset allocation.