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Given that I have at least 15 years until I stop working – and then hopefully many decades in retirement – my related portfolio is mainly focused on growth shares. I want to grow my money at the fastest rate possible in the years and decades ahead so that I have plenty of money later in life (and plenty to leave behind to future generations).
Now, I’m pretty happy with the shares in my portfolio — many are soaring. However, I decided to ask ChatGPT for 10 ‘world-class’ growth shares (to hold for at least 10 years) to see if it could improve my portfolio. Here’s what it came up with…
ChatGPT’s picks
The 10 growth shares listed were:
- Microsoft
- Nvidia
- Alphabet
- Amazon
- Taiwan Semiconductor (NYSE: TSM)
- Chipotle
- Tyler Tech
- SAP
- BAE Systems
- Autodesk
There are some well-known names on that list. However, there are also some more obscure picks such as Tyler Technologies (it does government software) and Autodesk (software for designing things).
Note that ChatGPT told me it offered a diversified selection of stocks. Eight out of the 10 are in the Technology sector though so there’s not a lot of diversification to be honest.
Not for me
Now, I already own the first four stocks. So these picks aren’t much use to me. So what about the other six? Could they boost my portfolio?
Well, I’m going to rule BAE Systems out. It’s a great company but I already own a defence ETF that gives me broad exposure to this industry.
I’m also going to rule out Chipotle. I love its food but I’m not convinced this stock’s capable of making me a ton of money over the next decade as the valuation is high and the company’s facing demand issues.
The three software companies, SAP, Tyler Technologies, and Autodesk, all look interesting. But they’re quite expensive, trading on forward-looking price-to-earnings (P/E) ratios of 38, 45, and 31 respectively.
Those ratios are high. So these stocks could increase the level of risk in my portfolio (which is already relatively high).
Should I buy this stock?
That leaves me with Taiwan Semi, the world’s largest chip manufacturing company. Now, this is a stock I’ve had on my watchlist for ages. I probably should have bought it years ago.
But Taiwan/China tensions have always spooked me. If this tension escalates, this stock could be crushed.
It could be worth the risk though. Let’s face it, demand for chips is only going to increase over the next few decades. And this company manufactures the most advanced ones. So in other words, it’s playing a huge role in the advancement of technologies like AI, self-driving cars, and robotics.
Looking at the valuation, the stock currently trades on a forward-looking P/E of 24, using next year’s earnings forecast. That’s not particularly high.
That said, chip stocks have had a huge run recently (this stock’s up almost 100% in six months). So, I’m not convinced that now’s the best time to buy Taiwan Semi for my portfolio.
The verdict on ChatGPT
So was ChatGPT helpful in my quest to enhance my portfolio? Not really. It did list some good companies. However, it didn’t seem to factor in valuations and other risks.
Overall, it didn’t highlight any opportunities that made me want to invest immediately.
