AI prompts & navigating volatile equity markets

US equity markets, especially a number of high-growth tech stocks, have been volatile in the past several sessions, after the launch of DeepSeek, the Chinese artificial intelligence (AI) startup. Yet, developments in the AI sphere are only one side of the equation while U.S. investors wait for earnings results from several tech darlings of 2024. In fact, JPMorgan Chase has already cautioned investors that 2025 will likely be marked by policy uncertainty, geopolitical risks, and heightened macroeconomic volatility. As central banks navigate a delicate balance between controlling inflation and supporting economic growth, markets are bracing for continued turbulence. Added to this are the unpredictable impacts of political decisions, such as tariffs and national debt management measures, which could disrupt global trade and investor sentiment.

How can investors chart a clear course amidst this turbulence?

This is where AI may step in as investors are looking to hedge their portfolios. Publicly available AI platforms may help investors analyze data, uncover trends, and make informed decisions quickly. However, the quality of these insights depends on the precision of your prompts. Poorly crafted queries can lead to vague or misleading outputs—outcomes no investor can afford during a potentially volatile year like 2025.

Before We Start: Test Your AI Prompting Knowledge!

Prior to discussing actionable AI prompts for navigating the current volatility, here is a quick quiz to help you test your understanding of how AI prompting may work for evaluating potential investment strategies. Take this short quiz to see where you stand:

1. What is the primary benefit of using AI prompts in volatile markets?
   a) Automatically predicting stock prices
   b) Gaining actionable insights from large data sets quickly
   c) Eliminating all investment risks
   d) Generating random investment strategies

2. Which of the following is a common mistake in crafting AI prompts?
   a) Using vague or overly broad queries
   b) Asking for analysis of specific trends
   c) Including measurable criteria like P/E ratios
   d) Refining questions for tailored outputs

3. Why is it important to balance AI precision with human expertise in investments?
   a) AI cannot process financial data accurately
   b) Human judgment is needed to verify niche insights and context
   c) AI is unreliable for large datasets
   d) Humans make faster decisions than AI

(Answers: 1-b, 2-a, 3-b)

Reader Spotlight: AI16Z - The AI Agent Revolutionizing Venture Capital

This week, we’re shining a light on AI16Z (or also known as ai16z), a closely-followed project that combines AI and blockchain and focuses on venture capital investing. The name ai16z is inspired by the renowned venture capital firm Andreessen Horowitz, often shortened to a16z (where "16" represents the number of letters between "a" and "z" in its name). By replacing "a" with "ai," ai16Z emphasizes its focus on AI as the core driver of its innovative approach to investing.

What Does ai16Z Do?
Launched in October 2024 by a developer known as "Shaw," AI16Z operates as a Decentralized Autonomous Organization (DAO)—an investment fund managed entirely by AI agents. The project’s flagship AI agent, AI Marc, is a nod to Marc Andreessen, co-founder of Andreessen Horowitz. However, AI Marc is not merely a symbolic name; it represents the autonomous intelligence driving ai16z’s operations, combining data-driven analytics with financial expertise.

ai16z’s standout feature, Real-Time Deal Evaluation, enables investors to compare new opportunities with historical deal performance and current market trends. This tool has gained significant traction, attracting investors who may use it to identify high-potential startups in industries like robotics, healthcare, and fintech.

Balancing AI Precision with Human Expertise
While ai16z offers powerful insights, it’s not without limitations. Like any AI system, it can occasionally misinterpret niche market data, leading to overvaluations, especially with startups. This is where experienced investors come in as they verify and contextualize its recommendations. Additionally, as with all crypto projects, the success and sustainability of ai16z depend on market dynamics, technological adoption, and regulatory developments.

An example of this synergy? Early adopters used ai16z’s analysis alongside their own judgment to identify promising startups during the 2024 market downturn, leading to impressive returns. Since its all-time low of $0.01 on November 3, 2024, the AI16Z token has surged by over 6,000%. Today, it boasts a market cap of $700 million, according to CoinGecko.

Stay Tuned for More

As AI agents like ai16z continue to evolve, they’re reshaping how investors approach complex financial decisions. In upcoming editions, we’ll explore more innovations that bridge the gap between data and strategy, helping you stay ahead in the ever-changing world of finance.

Closing Thoughts

As 2025 unfolds, AI prompting will be a crucial tool for navigating the markets with confidence and precision. Whether you're identifying trends, assessing risks, or exploring international opportunities, the key lies in asking the right questions.

What’s next?
In our next newsletter, we’ll explore advanced strategies for AI prompting, including how to refine your queries to uncover hidden opportunities and assess market risks more effectively. Have a question you'd like us to address? Share it with us, and it might be featured in the next edition!

(Please add our email address to your contact list so that the next newsletter goes into your Inbox folder: [email protected])