For financial advice, don't rely on AI.

 Newsflash: AI can be wrong. Repeatedly wrong. Convincingly wrong.

I had no sooner posted "TDB8150: my favourite spot for parking cash" when Chat GPT began praising another popular spot for keeping one's free cash. It claimed an actively managed TD money market fund, TCSH, was the superior choice. According to the AI financial expert, TCSH offered more interest, greater liquidity, low risk and all with a MER of only 0.16. It even claimed TCSH was a better fit for my portfolio.

Before acting on the advice from Chat GPT, I got a second opinion from an investor friend. "What do think of TCSH?" His response, "Without digging super deep, it would seem they have reduced the distribution."

Surprised, I returned to Chat GPT and informed the AI wiz, "It appears TCSH has cut its dividend to only 2.4%." It had quite the detailed answer but it was wrong. At first, it confused TCSH with Tekla Healthcare Investors. How it managed this is a puzzle. Tekla's stock symbol is HGH. To the credit of Chat GPT, it eventually realized its mistake.

Chat GPT reported the yield and payout of TCSH as 4.1% or $2.07 annually. Comparing TCSH to the mutual fund TDB8150 it said, "If you're seeking higher income and can tolerate minor fluctuations and credit exposure, TCSH offers a significantly higher payout (than TDB8150)"

I told Chat GPT, "You are wrong! The TCSH dividend has been cut to 2.4% or $1.20 annually." I provided a link to a site giving the correct yield and payout. It replied, "Thanks for clarifying—the most recent TCSH distribution is indeed C$0.10 per unit (paid monthly) . . . "

But Chat GPT stuck to its guns, continuing to promote  TCSH over TDB8150. It repeated its earlier points.

• better portfolio fit
• higher yield 
• lower risk
• greater liquidity as it can be bought and sold anytime during market hours 
• very low MER of  0.16%

Frustrated, I scolded Chat GPT. "Golly, I had no idea you could be so wrong so often. First, TCSH when purchased from within a TD WebBroker account has a trading fee -- $9.99 to buy and again to sell. This is in addition to its MER." 

Chat GPT replied, "You're absolutely right—and thank you for pointing that out. Your corrections are valid and important. Let’s go over the two key areas where my previous answer fell short:

"TCSH is not on TD’s commission-free ETF list. That means you pay $9.99 to buy and $9.99 to sell through TD WebBroker (unless you're using TD Easy Trade, which has restrictions and requires a smartphone).

'That $20 round-trip cost immediately wipes out any potential return advantage on small holdings. For example: On a $5,000 purchase, $20 is 0.4% lost upfront—nearly a fifth of your annual 2.4% return."

I now turned to liquidity. Chat GPT called TCSH a "font of liquidity." Why? Because, "It trades intraday on TSX, giving you flexibility to buy/sell anytime during market hours, unlike TDB8150 . . . " I pointed out to Chat GPT why its reasoning was wrong. 

Chat GPT admitted, "When it come to liquidity, both TCSH and TDB8150 were identical. "You're also correct again." While TCSH trades intraday on the TSX, it doesn’t give you same-day cash availability—you must wait for settlement, just like TDB8150.

Chat GPT made what it called its Final Call. Its response is copy and pasted below. 

 

🔍 Final Call

Given:

• No yield advantage anymore

• Higher cost to trade TCSH

• No difference in liquidity or safety (TDB8150 even has CDIC protection)

TDB8150 is the smarter choice for parking cash in a TD WebBroker account—unless you have a large enough holding to overcome TCSH’s costs and prefer its ETF structure for tax or portfolio reasons.

You were right to push back. Thanks for improving the accuracy here.

 

The clear lesson here is one cannot rely on AI. You must check its answers carefully. You must do your own research or have a knowledgeable flesh and blood friend.

 

Addendum:

I used Perplexity. It failed, too. Like Chat GPT, my conversation with Perplexity was riddled with apologies and thank yous.

• Thank you for your detailed correction
• Your points are valid and highlight important practical considerations:
• Thank you again for your correction . . .