Will people be discussing AI, the recession over dinner on 4th of July?
ALBAWABA – The topic of artificial intelligence (AI) will likely come up in conversation among financial professionals over the upcoming 4th of July holiday in the United States (US), according to a Bloomberg report published Monday.
About 40% of the professional investors surveyed by Bloomberg anticipated that AI will come up over dinner during the July 4 holiday, and 30% of retail investors agreed.
Clients often bring up AI in conversations about money, financial planner Kassi Fetters of Artica Financial Services in Anchorage, Alaska, told Bloomberg.
“The name of the game now is being okay in a constant state of adaptation, learning and change,” she said, adding that younger investors “view AI as another tool, instead of an enemy.”
In addition to AI talk, the risk of recession also emerged as a possible theme to be discussed at July 4 festivities. It is also likely to come up in conversations elsewhere around the world, according to the MLIV Pulse survey, with 593 respondents globally.
Yet, 48% of retail investors and 39% of financial professionals said they will absolutely avoid any conversation about finances at the next family get-together, as reported by Bloomberg.
Meanwhile, a trend is forming in the professional investors’ community, as more financial professionals lean towards more savings.
The drumbeat of job cuts in the financial industry may help explain why this trend, however, is more prevalent among professional investors than retail investors, according to Bloomberg.
Some 54% of professionals expect to save more this year than they did in 2022, compared with 43% for those respondents who don’t work in finance.
Nonetheless, the survey found professional and retail investors to be somewhat in sync in their approach to savings, as almost a third said they were looking for safer options.
Hedging against uncertainties
Nearly a third of both groups said their strategy is best described by the statement, “I’m putting most of my money in ‘safe’ assets like savings accounts, CDs and money market funds.”
Overall, this is reflected in the flux of cash flowing into money market funds.
Safe US assets stood at $5.4 trillion as of June 28, according to the Investment Company Institute, compared with $4.5 trillion at the same point in 2022.
According to Bloomberg’s survey, only 48% of professional investors preferred a 60:40 portfolio of safe and risky assets, respectively. Whereas 53% of the surveyed retail investors prefer safer investments to risky assets.
Moreover, 56% of professional investors and 58% of retail investors expect portfolios, including savings, to outpace inflation in 2023.
Most investors, both retail and professional, do not expect their pay to be the main revenue source that would enable their returns to beat inflation rates. Only 21% of professional investors and 10% of retail investors anticipate a return that beats inflation from their pay.
However, 50% of both samples have confirmed they are curbing everyday spending.
Vultures of the investment world
Despite the majority of the respondents reaffirming caution ahead of a more difficult season, there are the vultures of the investment world, always circling.
Some respondents confirmed to Bloomberg that they are “waiting in Treasuries to move on distressed real estate” or keeping a “stash of cash to deploy opportunistically.”
