I Asked ChatGPT How To Earn Money When the Stock Market Is Volatile: Here’s What It Said
Written by
Brooke Barley
Edited by
Jenna Klaverweiden
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The stock market can be a solid investment plan — if it’s done well. With ups and downs in the market like we’ve seen this year, new investors might view stocks as risky bets. It’s imperative to stick to a plan that’s going to weather stock declines.
Here’s what ChatGPT recommended doing in times of stock market volatility.
Focus On Dividend Stocks
Dividend stocks regularly pay out a set amount to shareholders. Even when the market wavers, investors will likely still receive a piece of the pie.
ChatGPT suggested investing in dividend stocks via the Vanguard High Dividend Yield ETF (VYM). ChatGPT added that reinvesting dividend money into the stock is a smart move that also steels you against market dips.
Try Dollar-Cost Averaging
Another method ChatGPT recommended was dollar-cost averaging. To do this, set up your bank account to invest a set amount of cash into the stock market on a regular basis.
Using this method, ChatGPT pointed out that “you buy more shares when prices are low and fewer when prices are high, averaging out your cost and reducing the stress of timing the market.”
Explore Advanced Options
For those who already know a fair amount about the stock market and feel more comfortable, ChatGPT recommended two courses of action.
One is to sell covered calls, which means you set a price (known as the strike price) and a time frame to sell your stock to an investor at that price. In exchange, you’ll earn a premium. This is a good way to earn money on stocks you own — especially in stocks that don’t fall or rise very much. Know that you have to own 100 shares per contract, and that you must sell the stock at the price you set. This means if it goes above that price, since you sold it already, you won’t benefit from that gain.
Another advanced option ChatGPT suggested is selling cash-secured puts. “Here, you don’t own the stock yet. Instead, you agree to buy it at a lower price if it falls to that level within a specific time frame. You’re paid a premium for making that agreement,” ChatGPT explained. You’ll need to have enough capital on hand to buy 100 shares.
Expand Investments
Looking outside of the stock market is also a possibility.
ChatGPT suggested gold bonds and real estate as alternatives to investing in the stock market. This way, your portfolio is more diversified so your income doesn’t depend solely on one investment strategy.
Use High-Interest Savings or CDs
High-yield savings accounts and certificates of deposit (CDs) can feel safer than the stock market because there’s no real risk of loss. Storing cash in a high-interest savings account means your money grows as long as it’s in the account. Similarly, CDs will grow at a set rate after a predetermined amount of time, so you know exactly how much money you’ll get out of your investment.
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