Understanding AI Limitations
The AI Research Assistant is a powerful tool, but it’s not magic. Understanding what it can and can’t do helps you use it effectively and interpret its responses appropriately. This article covers the key limitations you should know about.What the AI Cannot Do
1. Predict the Future
The AI cannot tell you:- Where a stock price will be tomorrow, next month, or next year
- Whether the market will go up or down
- Which stocks will outperform
- When to time your buys and sells
2. Give Personalized Investment Advice
The AI cannot tell you:- What to buy, sell, or hold
- Whether a stock is right for your portfolio
- How to allocate your investments
- Whether you should invest at all
3. Access Private Information
The AI cannot:- See non-public company information
- Access insider data before it’s filed
- Know about deals or news before public announcement
- Read private documents or communications
4. Execute Trades
The AI cannot:- Buy or sell stocks for you
- Place orders in your brokerage account
- Manage your portfolio automatically
- Make transactions of any kind
5. Guarantee Accuracy
The AI cannot guarantee that:- Every number it provides is correct
- Its analysis is error-free
- Data is completely up-to-date
- Its interpretations are the only valid ones
Types of AI Errors You Might Encounter
Hallucinations
Sometimes AI generates plausible-sounding but incorrect information. This might include:- Inventing statistics that don’t exist
- Attributing quotes to people who didn’t say them
- Creating facts that sound reasonable but aren’t true
Outdated Information
The AI pulls from regularly updated databases, but:- There can be delays between events and data updates
- Breaking news may not be immediately reflected
- Historical training data may contain outdated context
Calculation Errors
Occasionally the AI might:- Make arithmetic mistakes
- Misapply formulas
- Compare metrics incorrectly
Misinterpretation
The AI might:- Misunderstand your question
- Focus on the wrong aspect of your query
- Give a technically correct but unhelpful answer
Data Limitations
Timing and Freshness
| Data Type | Typical Update Frequency |
|---|---|
| Stock prices | Real-time (Pro) or 15-min delayed (Free) |
| Financial statements | When companies report (quarterly) |
| Analyst estimates | As analysts update (varies) |
| SEC filings | As filed (usually same day) |
| News | As published (varies) |
| Insider transactions | As filed (up to 2 business days after trade) |
Coverage Gaps
The AI may have limited or no data for:- Very small or newly public companies
- International stocks (coverage varies by market)
- OTC/pink sheet stocks
- Certain alternative assets
- Very recent IPOs
Historical Depth
Historical data availability varies:- Price data: Often 10+ years
- Financial statements: Typically 5-10 years
- Analyst estimates: Usually 2-3 years
- News archives: Varies significantly
Regulatory Limitations
Some limitations exist because of financial regulations, not technical constraints:| Limitation | Reason |
|---|---|
| No buy/sell recommendations | Requires RIA registration |
| No personalized advice | Requires knowing your situation + registration |
| No specific price predictions | Would constitute market manipulation |
| No guaranteed returns | Would be fraudulent |
How to Work Within These Limitations
Verify Important Information
Before acting on any AI-provided information:- Cross-reference with the stock page data
- Check official sources (SEC EDGAR, company investor relations)
- Look at multiple data points, not just one
Use the AI as a Starting Point
Think of the AI as a research assistant, not an oracle:- Use it to gather information and identify questions
- Form your own conclusions from the data
- Consult professionals for significant decisions
Ask Follow-Up Questions
If something seems wrong or unclear:- Ask the AI to explain its reasoning
- Request sources or data points
- Rephrase your question for clarity
Report Errors
Help us improve by reporting inaccurate responses:- Use the feedback buttons (👍 👎) on AI responses
- Be specific about what was wrong
- This helps us identify and fix issues
What We’re Doing to Improve
We continuously work to make the AI more accurate and helpful:- Regular data updates from multiple financial data providers
- Model improvements to reduce errors and hallucinations
- User feedback integration to fix reported issues
- Expanded coverage for more securities and data types
- Better guardrails to catch potential errors before they reach you
The Bottom Line
The AI Research Assistant is a powerful tool that can save you hours of research—but it’s a tool, not a replacement for your judgment. Use it to inform your thinking, not to make decisions for you. Verify important information. And remember that investing always involves uncertainty that no AI can eliminate.Important: Rallies.ai is an investment research and educational platform. We are not a registered investment advisor. The AI provides information and analysis, not personalized advice. Read our full disclaimer →