An AI hallucination is a plausible-looking statement or output that lacks support or is factually wrong. In investment research, accepting one without verification can turn speculation into financial loss. section 8.2.3 section 8.0
Treat hallucination risk as a reason to investigate, not as a reason to discard LLM-assisted research:
- Review generated claims before using them in an investment decision. section 8.5
- Use detailed company questions to build evidence for a scorecard instead of requesting generic stock picks. section 8.0
- Combine model-generated ideas with further investigation because investment advice remains speculative. section 8.5
From stock picks to company research
The prompt “Recommend me three stocks” invites risky, potentially hallucinated advice. Asking about company X’s management style produces research that can contribute to an individual investment scorecard, but still requires verification. section 8.0
