Connecting What’s Happening to What Really Matters
AI is driving economic growth, and you likely already hold some of it in your portfolio. In this month’s Beyond the Headlines segment, Zach Horn explains how we’re participating in its growth with discipline, so your plan doesn’t hinge on any one technology. He looks back at past buildouts and how AI compares.
Zach shares why AI and your advisor work best together and introduces Aaron Robeson, our new Director of AI and Innovation. With years of data science experience and a passion for applied AI, Aaron is supporting the firm's efforts to improve internal systems and put new tools to use.
Sources:
Don't want to watch the video? Here’s the transcript you can read instead:
Hi, I’m Zach Horn, and welcome to the October edition of Beyond the Headlines.
If it feels like every other story this year has been about artificial intelligence, you’re not imagining things. So this month we’re dedicating our entire update to AI, what it means for the economy, for your portfolio, and for how we serve you here at Foster & Motley.
Let’s start with the big picture. AI spending has become one of the most powerful engines in the U.S. economy. RBC’s economists estimate that without the AI investment boom, economic growth this year would have run at about half its pace.
The scale of this buildout is remarkable. As Mark Motley shared in our recent Market Update, AI investment as a share of the economy is projected to outpace the railroad boom of the late 1800s and reach about three times the size of the interstate highway buildout. Those projects reshaped how America lived and worked for generations, though they came with plenty of bumps along the way.
You can see AI’s influence in the stock market as well. Nvidia, Apple, and Microsoft now make up more than 21 percent of the S&P 500, the most the index has ever been concentrated in just three companies.
AI is already part of your portfolio, and that’s by design. We believe in where this technology is headed. What we won’t do is let one technology drive your whole plan. Your AI holdings sit inside a broader mix that includes other industries, and markets outside the U.S., where we think more exposure is warranted right now. We call this disciplined participation. If the technology keeps delivering, you share in the upside. If it hits a rough patch along the way, your plan doesn’t hinge on it.
AI is also changing how people manage their money, and we think that’s a good thing. About one in three Vanguard investors say they’ve used AI for help with personal finance, investing, or retirement planning.
Many are using it the smart way, as a starting point to learn concepts and test ideas. In fact, investors were about three times as likely to use AI to prepare for a meeting with a financial professional as to replace one. And among investors who work with an advisor, 41 percent say AI has made them value their advisor more.
That makes sense to us. A chatbot can explain what a Roth conversion is. Deciding whether one makes sense for your family this year takes someone who sees your whole picture, from your tax return to your goals, and who knows you well enough to be honest with you when markets get bumpy and emotions run high. AI and your advisor work best together.
We’re putting that same idea to work inside our own firm. We’re investing in AI tools that take routine work off our team’s plate, so we can spend more of our time with you.
To lead that work, we brought on Aaron Robeson as our Director of AI and Innovation. Aaron spent seven years at Kroger’s data science company, where he managed a data science team. In collaboration with our IT team, he’s starting with the foundation of connecting our systems while making sure the data behind them is clean and secure. Good tools depend on good data, and we’re excited about what that foundation will make possible for our clients.
AI will keep making headlines, and we’re optimistic about where it’s headed. We’ll keep approaching it the way we approach everything else, by staying invested, staying diversified, and sticking with the long-term plan we built together.
If you’ve been using AI to think through your finances, we’d love to hear about it! Bring your questions, and AI’s answers, to your next meeting, and we’ll work through them together.
Thanks for watching, and we’ll see you next month.