NYU paper: AI assistants push retail investors into index funds by 7.6pp
danielrock · x · 2026-11-09
A job market paper by NYU Stern's Valerie Baldinger, "Generative AI and Retail Investment," links retail investors' prompts and AI answers to trade-level and portfolio data using a staggered difference-in-differences design. Findings: generative AI adoption raises index-fund allocation relative to individual stocks by 7.6 percentage points, cuts average return loss from underdiversification by 43 basis points, and the least-diversified portfolios improve most, with return losses falling 101 basis points. In short: a chatbot persuaded people to buy index funds after 50 years of lectures failed.
More from AGI Musings
- Making up numbers transparently beats hiding behind vibes, researcher argues in EA debate — davidmanheim · 2026-11-09
- Study: AI chats introduce a new vendor in two-thirds of software buying conversations — VeryWellVersed · 2026-11-09
- Hot take: good AI judgment is now the new median reviewer — 3scorciav · 2026-11-09
- AI insider warns public perception will worsen as frontier progress outpaces intuition — manosaie · 2026-11-09
- Toby Ord: METR's 50% Time Horizon Can Go to Infinity Without Transforming the World — tobyordoxford · 2026-11-09
- 'Argon is a fun model to think with': an AI's eerie first-person riff on reading and death — aiamblichus · 2026-11-09