Artificial Intelligence (AI) seems to be the latest and hottest craze when it comes to investing. Pundits and the so-called experts have said that AI could well define the next decade and beyond. Therefore, it would seem to make sense that you get in on the ground level before the value of those companies and stocks take off. But of course, if life were that simple we would all be rich!
If you are going to invest in AI, what factors should you consider?
Business not Stocks
This is the advice from one of the world’s most successful investors- Warren Buffett. He says, in general, that people should pick businesses and not stocks. He has said he is a business picker and not a stock picker. In other words, when investing in a business, think about the opportunity as though you are investing in it as a partner and not based exclusively on the stock price.
As a partner you are looking for certain characteristics in the company and you may be in it for the long term. It does not mean you stay with the investment forever, but when the company’s prospectus changes your move on from them with your investment.
If you are going to establish an AI fund, you should know that many of these investment funds contain a mixture between AI and robotics. When choosing to establish your investment, there is a healthy overlap between robotics stocks and AI stocks, and therefore it is important to know the balance and risk exposure in each fund. Having said that, there is nothing wrong in having both in an Exchange Traded Fund (ETF).
I would not want to assume you know the difference between robotics and AI, but without getting technical it is very simple and relatable. Artificial Intelligence is using machines to resolve complex problems or decisions autonomously. This shows up in our lives daily. If for example you are online shopping and looking for one particular item, through AI you will start receiving several advertisements and other solicitations regarding the same or similar products. That’s more AI than robotics. Robotics respond to a specific set of programmed instructions, commands, or data that limits the machine operating or “thinking” outside the box.
AI on AI
So how do you know exactly which AI stocks to choose? One option is to select a firm which uses AI to select AI stocks for your investment. Using big data and AI to choose stocks, while not new, has been reserved for institutional investors and not we, the little people.
Ah! But with the evolution of technology, a financial technology firm called Danelfin uses AI-driven analytics to give “we the people” access to institutional-level technology. Through this fintech firm’s technology, which uses AI, regular people are able to analyze more than 900 fundamental, technical, and other data points per day for all U.S. listed shares.
Note here that human analysis does not always agree with the stocks AI is suggesting you purchase, but like picking any other investment, let the buyer beware. You can also choose your AI investment companies the regular or traditional way. You could focus on investing in companies that are developing AI products and services. Or, you can try consumer focused AI development. Some companies may be considered developers and enablers in both robotics and AI industries. However you choose and whatever you do, it seems like AI stocks are worthy of conversation with your financial adviser.
THAT’S WHAT’S UP!
Today’s What’s Up is about personal taxes.
Well, it’s that time of the year again when those who have attempted to put off the inevitable must do the inevitable. Yes, on October 15, 2023, those who did not file their taxes on April 15, 2023 for tax year 2022, and have filed an extension, will now have to file their personal taxes by this deadline.
If you are expecting a refund, well the deadline is not important for tax year 2022. However, since the statute of limitation on refunds is three years, if you have not filed your returns for 2020, you could be in jeopardy of losing your refund for that year.
Finally, the Failure to File Penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty won’t exceed 25% of your unpaid taxes. And that’s what’s up!
Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2023. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.