Artificial intelligence (AI) and its impact on the financial industry, as well as concerns about a possible recession, are expected to be key topics of discussion among financial professionals and investors during July 4 gatherings, according to a survey by Bloomberg. The survey indicates that approximately 40% of professional investors and 30% of retail investors anticipate conversations about AI alongside the traditional burgers and beer. While AI’s influence on investment flows into the technology sector is widely recognized, it is also seen as a disruptive force in wealth management. Younger investors, in particular, view AI as a valuable tool rather than a threat, emphasizing the importance of adaptability and embracing change.
Bloomberg cites Kassi Fetters, a financial planner at Artica Financial Services in Anchorage, Alaska, who notes that clients frequently initiate discussions about AI in relation to their financial matters. The wealth management industry is increasingly being shaped by AI-driven technologies, prompting professionals to embrace continuous adaptation, learning, and change. The younger generation of investors sees AI as an additional tool to enhance financial decision-making rather than an adversary.
Recession concerns are also expected to be part of the conversations during July 4 festivities worldwide. However, the survey reveals that around 48% of retail investors and 39% of professionals prefer to avoid financial discussions during family gatherings, indicating a cautious approach to sensitive economic topics.
Due to ongoing job cuts in the financial industry, a higher percentage of professional investors prioritize saving compared to retail investors. The Bloomberg survey shows that 54% of professionals expect to save more in 2023 than the previous year, while 43% of non-finance respondents share the same sentiment. Both professional and retail investors exhibit similar strategies, with approximately one-third of both groups preferring to invest in “safe” assets such as savings accounts, certificates of deposit (CDs), and money market funds.
Investors have already allocated significant amounts of cash to money market funds, with assets reaching $5.4 trillion as of June 28, compared to $4.5 trillion in the same period the previous year. The most popular investment approach among professionals (48%) and retail investors (53%) is a balanced 60/40 portfolio, diversifying funds between safe assets and riskier options like stocks and alternatives. Additionally, 56% of professionals and 58% of retail investors anticipate their investment portfolios to outpace inflation this year, with expectations centered around actual, inflation-adjusted returns from stocks.
In the comments provided by survey respondents, gold and profits from options trading received multiple mentions as investment strategies. However, one participant highlighted the importance of “contentment” as a means to surpass inflation. While some investors are adopting defensive measures by cutting everyday expenses in preparation for a potential recession, others are patiently waiting in treasuries to seize opportunities in distressed real estate or maintaining a cash reserve for strategic investments. Interestingly, one respondent emphasized the significance of mental health and resilience, suggesting that future AI-driven applications could provide support in this aspect.
