Question:

What are your preliminary thoughts on Artificial Intelligence (A.I.) and its use in the Market Place?

Answer:

A.I. and the Roaring Twenties.
A.I., Artificial Intelligence, is widely used to support or even make the final decision to place buy and sell security orders without human interference. It is not surprising that the A.I. programmers lean toward being somewhat conservative. I see that conservativeness in the market.

There is also another factor; A.I. uses historical data to make decisions. That presents a problem when there is a lack of data. Data from periods before the advent of computers is sketchy. The last time we had a war end, and a pandemic was one hundred years ago. What followed was the Roaring Twenties. But little data for A.I. to work with.

We recently had a war end and a pandemic, a bear market and a recession. All at the same time. We had corporations in crisis. Doing everything to become more efficient and more innovative. It worked. We just saw the largest percentage profit growth in decades.

There is plenty of value in AI, particularly with gathering information. However, when it comes to decision making within accounts, we will continue to use Real Intelligence.

While conservativeness and the limiting of volatility becomes more present with AI, we remain convicted in our projections from 2020. We may just see our own Roaring Twenties.

Remember, market volatility is the price you pay for above market returns.

*in the case of a discrepancy between Fidelity Investments monthly statements and Katz Family Financial monthly portfolio statements, Fidelity Investment statements should be deemed as the correct and accurate report source.