I Asked ChatGPT Which Investments Won’t Survive the Next Recession: Here’s What It Said

For a while now, it has seemed like a recession is just around the corner. As prices increase, the job market becomes unstable and political curveballs keep coming down the line, it’s harder and harder to say what investments — if any — could withstand the economic fallout.

As an experiment, GOBankingRates asked ChatGPT which investments won’t survive the next recession. Any advice should be thoroughly analyzed and investigated independently with a qualified financial professional before you do anything with your money.

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The following answers are only what the AI chatbot reported. “Short answer: The stuff that only works when money is cheap, growth is perfect, and nobody asks hard questions.”

Highly-Leveraged Companies and Assets

When interest rates stay high or credit tightens, debt becomes deadly, according to ChatGPT, citing that likely casualties could include companies with weak cash flow and lots of debt.

It might also cover private equity deals loaded with leverage and overextended commercial real estate projects due to refinancing risks and shrinking profits, which could send them spiraling.

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Speculative Tech and ‘Story Stocks’

As ChatGPT put it: companies that are valued on potential, not profits. A few examples listed included Unprofitable SaaS, hype-driven AI plays with no moat and startups surviving on constant fundraising.

That’s because “investors stop paying for dreams and start demanding earnings. Ruthlessly,” ChatGPT noted.

Overpriced Real Estate Segments

Not all real estate is endangered, according to ChatGPT, just certain sections of the market. Those more vulnerable slices include commercial office buildings which still have not fully recovered since the last recession, short-term rental markets in oversaturated tourist cities and luxury condos dependent on easy mortgages.

The AI explained these areas are at risk because of refinancing walls and higher rates, but also a drop off in demand.

Consumer Discretionary Brands

“These get hit the moment people feel nervous,” ChatGPT stated, highlighting that potential victims of an economic downturn could include luxury goods, high-end fashion and trend-driven retail brands, not to mention nonessential subscription services.

The chatbot pointed out that “nice-to-have” services and items tend to be the first thing consumers cut from their budgets in a recession.

Crypto and Other Risk-On Assets

“Crypto behaves like high-beta tech in downturns,” ChatGPT reported, noting that what struggles most in a recession are meme coins, tokens without real utility and platforms dependent on trading volume.

The AI described this investment collapse: Once liquidity dries up, volatility explodes.

Dividend Traps

From what ChatGPT sees, a high-yield investment doesn’t mean a safe one.

It cautioned to beware of companies paying dividends from debt, shrinking revenues but unchanged payouts, and yields that look “too good to be true” because recessions expose who can actually afford those dividends.

Emerging Markets With Weak Currencies

ChatGPT mentioned that this is especially true for those reliant on foreign capital.

“Problems during recessions: Capital flight, currency devaluation and debt crises (especially dollar-denominated debt),” described the AI chatbot.

This popular tool provides a pretty solid summary of some investments to reconsider in case an investment hits, but remember to consult a financial professional before you make a final decision on how to reinforce your portfolio.

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This article originally appeared on GOBankingRates.com: I Asked ChatGPT Which Investments Won’t Survive the Next Recession: Here’s What It Said