I wondered what Bing AI (Chat GPT, from Microsoft) would tell me if I wanted to shape my investments to profit from a rapid acceleration of climate change. Disappointing that Bing had no new ideas -- or if Bing has some good investment strategies Bing is keeping it secret.
I'll stick with my model portfolio. Guessing markets is a risky business and usually unprofitable. I'll let you know if I see any can't-miss investment strategy that works better than what's worked for the past 100 years, steady non-reactive investment in the stock market.
Here's the chat transcript.
Me:
list investments that will outperform overall market if climate change accelerates
Bing:
If you’re looking for investments that could potentially outperform the overall market if climate change accelerates, there are a few options to consider. One such option is impact investing. Impact investing is a type of investment that aims to generate a positive social or environmental impact alongside financial returns 1. A recent study by the Global Impact Investing Network revealed that 79% of investors met or exceeded their financial targets, while an impressive 88% achieved their impact goals 1.
Another option is to invest in companies that are actively working to combat climate change. For instance, companies that produce renewable energy sources such as solar and wind power could be a good investment choice 2. Additionally, companies that are developing new technologies to reduce carbon emissions could also be a good investment opportunity 3.
Me:
I need bigger winners. Maybe I should try a "Big Short"? list investments that are most vulnerable to climate change
Bing:
Investments that are most vulnerable to climate change are those that are heavily dependent on natural resources, such as agriculture and fishing 1. Climate change can cause droughts, floods, and other extreme weather events that can damage crops and disrupt fishing industries 1.
Additionally, investments in fossil fuels could be vulnerable to climate change. As the world shifts towards renewable energy sources, demand for fossil fuels could decrease, leading to a decline in the value of these investments 2.
Me:
I doubt demand for fossil fuels will fall. That would require world consensus. Can I short coastal municipal bonds?
Bing:
Shorting coastal municipal bonds is a complex financial decision that requires careful consideration. Coastal municipal bonds are issued by local governments to fund infrastructure projects such as roads, bridges, and public buildings 1. The value of these bonds could be affected by a variety of factors, including climate change, natural disasters, and other environmental risks 2.
Shorting these bonds could be a risky investment strategy, as it involves borrowing bonds from a broker and selling them in the hopes of buying them back at a lower price 3. If the value of the bonds increases instead of decreasing, the investor could face significant losses.
Me:
list insurance companies most vulnerable to climate change
Bing:
Insurance companies are facing big challenges due to the impacts of climate change 1. The insurance sector is particularly vulnerable to the physical impacts of climate change, and has already faced growing losses 2. A 2019 global survey found that 72% of insurance companies believe climate change will affect their business, but 80% of them have not taken significant steps to lessen climate risks 1.
While there is no definitive list of insurance companies that are most vulnerable to climate change, some companies are more exposed to climate risks than others. For instance, companies that provide insurance for coastal properties could be vulnerable to rising sea levels and more frequent storms 3.
It’s important to note that investing always carries some degree of risk, and there is no guarantee that any investment will outperform the overall market. It’s always a good idea to do your own research and consult with a financial advisor before making any investment decisions.
I hope this helps!
Me: Thanks, Bing. I didn't see any big winners in here, but I appreciate the thoughts!
Michael Dayoub, CFP® is a fiduciary fee-only investment advisor in Georgia with clients across the United States.