Tag Archives: investing

Investing in AI: what stocks will it pay off for?

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Investing in Artificial Intelligence: We feel it could have a huge positive potential, but watch for these risks and rewards

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Artificial Intelligence (AI) only crossed the fiction-to-news barrier in recent years, after decades as a staple of Arnold Schwarzenegger films, but it’s already influencing the economy and is likely to increase its impact. We feel it could have a huge positive potential. This development has also caught the attention of many investors who are contemplating the prospects of investing in AI.

Media comments on this subject abound, as do surveys.  The average person seems fascinated with AI’s potential for good, but wary of its potential for harm. You might say this resembles the atmosphere a decade or so ago when self-driving cars started appearing in the news.

In both cases, middle-of-the-roaders were in the majority. Extreme types came up with much different outlooks.

Negative observers said self-driving vehicles would lead to an economic collapse because multitudes of drivers of trucks, taxis, buses and so on would lose their jobs.

At the other end of the spectrum, a smaller extreme felt driver-less vehicles would balloon human productivity and expand wealth around the world. After all, people could do valuable work in traffic, just as well as in an office, or use the time for a nap. They looked forward to a day when owning your own car would be a needless extravagance. When you needed a lift, you’d just summon a driver-less limo on your cellphone. A little further along, new homes will be available with or without garages or parking spots. Your self-driver will be able to valet itself to a community parking lot.

Looking a little further still, your car might be able to take itself out for maintenance, service, fuel, or any number of errands. Artificial Intelligence just might speed the arrival of these advances.

However, there’s an even wider opinion spectrum on Artificial Intelligence. Rather than a booming jobless rate, the negative side foresees Armageddon: humans versus machines.

It seems conflicts of interest are playing a role, along with honest differences of opinion, in disputes over Artificial Intelligence. This reminds me of the debate over Y2K.

The Y2K debate showed there is big money in alarmism. Some of the top Y2K promoters used Y2K fears to build a following and boost their incomes from writing, consulting or public speaking. Pessimists worried needlessly about Y2K and made a lot of money. I expect the same reaction to AI.

Mainstream opinion or Al Gore on steroids?

Ratings for cable news pioneer CNN have been slumping for a decade. Coincidentally, CNN.com recently published an essay entitled: “Experts are warning AI could lead to human extinction. Are we taking it seriously enough?”

The essay begins: “Think about it for a second … The erasure of the human race from planet Earth. That is what top industry leaders are frantically sounding the alarm about … potential dangers artificial intelligence poses to the very existence of civilization.”

It passes along a warning: “… hundreds of top AI scientists, researchers, and others … voiced deep concern for the future of humanity, signing a one-sentence (italics added) open letter to the public … mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war …”

You have to give them credit for leaving climate change off the list.

Read Marc Andreessen’s essay on AI

If you’re investing in AI and Artificial Intelligence fears keep you awake at night, I’d suggest a 7,000-word remedy by Marc Andreessen, entitled, “Why AI will save the world.”

In all I’ve read about AI, this is the best comment I’ve seen. It describes AI in plain English; explains how AI can expand human intelligence; how we have used human intelligence over millennia to create today’s world. It also speculates about the gains we may see in the new era of AI. Continue Reading…

Lessons we Learned in 2024

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Billy and Akaisha in Sorrento, Southern Italy; Photo courtesy of RetireEarlyLifestyle.com

By Akaisha Kaderli, RetireEarlyLifestyle.com

Special to Financial Independence Hub

 “Improvise, Adapt, and Overcome” – Marine slogan

What a year!

Every year brings new challenges that we must face. Life doesn’t stop and the best way to meet the “new” is with an open attitude and a sense of confidence. Fear doesn’t help anyone or anything.

Solid plans often break

Our Readers will sometimes say they have just a few more things to settle, a few more “I’s” to dot and “T’s” to cross before retiring. They’re waiting for the health care issue to be settled, waiting for the bonus check next year, waiting to hit “this” particular financial number, waiting for next year to sell their properties, waiting for things to mellow out in the country, waiting for inflation to go down, waiting for the market to go back up,… they’re waiting…

Personal Financial Independence was put off until this imaginary perfect time, and then finally they planned a year of travel. But BAM! One of the spouses became gravely ill with a disease that not only shook them up, but forced them to shelve all excursion plans. Or the market started pulling back giving them the willies and they lost confidence in their future plans of early retirement.

Ask yourself, “What are you waiting for and why?” Then ask yourself if you have a Plan B for these unexpected situations.

Lots of people wait until they graduate from law school, or get the degree or wait until they get married, or until they buy that perfect house, or until the kids get out of school, or they hit that magic number to retire – in order to be happy.

They live for tomorrow and forget all about the pleasures and happiness of today.

Stop settling, start living. NOW.

You’re not going to get anything in Life by playing it safe. There are no guarantees.

Lesson learned; Faith over Fear, Don’t Worry be Happy

Image courtesy RetireEarlyLifestyle.com

We only have control of ourselves.

I get push back on this one, sometimes. Usually it falls under the “You don’t understand what I’m going through” category.

But if you think about it, stuff happens.

We can’t control a loved one getting ill, can’t control that our children or spouse do what we prefer. We don’t have a lot of say in international peace relations. Whether our children get divorced, illness knocks you or a loved one for a loop, there’s a huge business loss or politics don’t go our way – all we have control over – is our response to the situation.

If you are feeling out of control on your moods, there are lots of tools to clarify your mind and calm yourself down and lots of services available to you. Don’t let the stress build up until you have an even worse situation happen.

Lesson Learned; Life is not in our total control – only our response to it is.

Relationships change

Relationships are cemented or lost every year. Change is part of life, and some relationships don’t move forward with us.

Once again if you think about it, when you got married, had a child, moved cross-country, got that promotion, contracted a serious illness, got divorced, retired early or hit any other life milestone, did some friendships recede?

Most likely.

Life is change and sometimes your better future lies ahead of you, without those loved people in them.

Yes, it IS difficult to let go of habits and people. We’ve all been there at different points in our lives. It’s better to process the loss and continue to move forward, creating the life of our dreams, than to become bitter and angry over the loss.

In my opinion, 2024 was a year of clarification.

What I mean is, yup. Things fall away. Sometimes it’s beloved things and people. I think this helps us to focus on what really matters to us. This is a blessing in disguise and you will be stronger for it.

Lesson Learned; As you grow, some relationships won’t make it into your future.

Fear seems ever-present

When we are afraid of something, chances are, we don’t know much about it. Our perceptions are skewed because of this.

Remember the old saying – FEAR is False Evidence Appearing Real?

Take control and choose to find out more. The knowledge you discover will give you options and open up doors for you. Question the thoughts you are thinking and the beliefs you are holding. Question the definitions you have set for yourself. Fear does not serve you in any way and will only force you to contract, limiting your options even further.

This is a choice.

You can either learn and grow or contract and suffer because of it.

Lesson Learned; Fear is related to ignorance. Choose to learn more

People retreated into perceived safety

There is no safety, there are no guarantees. And sometimes as we age, we think we’ll feel better if we just “don’t take any chances.”

Remember Helen Keller’s quote:

Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing.

You can either live your life or live in FEAR.

Make the most of life every day. It’s later than you think!

Lesson Learned; Life is a risk every day. Manage it.

Anxiety seems to be everywhere

This is a good one, and it surprised me a bit.

Living the “life of my dreams” I hadn’t realized that I was still carrying friction and tension in assorted areas of my life. Billy and I started getting massages more often. I began going to a chiropractor, and my customary yoga became more important. We upped our exercise routine, I meditated more and I opened my mind to new information.

Anything that just didn’t “fall into place easily” or no longer worked … we dropped.

This made us feel freer and gave us more physical energy, clearing our minds.

Lesson Learned; Make things easier on yourself in any and all ways.

Don’t stop living your life

When things change beyond our control, we must find the advantages in the situation and make the most of where we are. Continue Reading…

Five ways that Financial Marketing can mislead investors

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Public domain image provided by Justwealth

By Robin Powell, The Evidence-Based Investor*  

Special to Financial Independence Hub

* Republished from the Just Word Blog from Robin Powell, the U.K.-based editor of The Evidence-Based investor and consultant to investors, planners & advisors  

Much as we like to think of ourselves as savvy consumers, we are actually very susceptible to PR and advertising. This is particularly true when it comes to investing.

Big banks like TD, RBC and Scotiabank, asset managers like Sun Life and Manulife, and online trading and investing platforms like Questrade and Wealthsimple, spend vast sums promoting their products and services. The more they spend, the more customers they attract.

Why, then, are people so receptive to financial marketing and so easily persuaded by it? In most cases it’s a lack of understanding. The financial markets are complex, and we’re bombarded with suggestions as to how to invest our money. In a world saturated with information, consumers rely on simple marketing messages to help them make decisions. They also derive comfort and security from large financial brands they’re already familiar with.

Big does not mean Best

The problem for investors is that the firms whose products are most often featured in the media are usually not the best ones to buy. The brands you’re most likely to see sponsoring hockey teams or film festivals, for example, or plastered across billboards in airports or train stations, are often just the sorts of companies you should avoid giving your business to. Why? Because the interests of consumers and big financial brands are often misaligned.

Financial firms are very clever at making it look as though their primary motivation is to help the likes of you and me to achieve better outcomes. But the bottom line is that they’re businesses, and their number one priority is to generate profits. To put it bluntly, these companies want our money. The more money we invest with them, and the more trading we do, the bigger the profits they make.

Financial education is extremely valuable. Educated investors almost invariably enjoy better outcomes. The danger, though, is that, all too often, we think we’re being educated when in fact we’re being sold to.

How Big Brands mislead us

There are all sorts of ways in which big financial brands mislead us. Here are five main ones.

1.) Emotional Appeal

Ideally, investors would act at all times in a calm and rational manner. We would only make decisions after carefully considering the available information and weighing up the options. But human beings are emotional animals, and financial marketers understand this better than anyone. This is why they deliberately appeal to emotions like fear and greed, and the fear of missing out, or FOMO, which, in a sense, is a combination of the two.

2.) Cognitive Biases

As well as their emotions, investors have to contend with a range of cognitive, or behavioural, biases that all of us are prone to. These include confirmation bias (our tendency to seek out information that confirms our pre-existing beliefs), herd behaviour (our instinct to copy what those around us are doing) and recency bias (our tendency to attach more weight than we should to recent events). Financial marketers know just the right buttons to press to exploit these built-in biases.

3.) Expert Endorsements

In his book Influence: The Psychology of Persuasion, the American psychologist Robert Cialdini writes about the importance of what he calls social proof. When we feel uncertain, he explains, we tend to look to others for answers as to how we should think and act. Closely related to this is the principle of authority, or the idea that people follow the lead of credible experts. So, for example, if someone recommends a certain product or strategy in the media, we’re inclined to take notice, even though that person may be heavily biased or not an expert at all.

4.) Scarcity and Urgency

Another way in which financial marketing leads consumers astray is that it generates a false sense of urgency. So, for instance, we might read about a particular investment “opportunity” — perhaps a hot stock or fund — in the weekend newspapers and feel impelled to buy it first thing on Monday morning. This is a very foolish way to invest. Of course, that stock or fund may well rise in value, but its price could just as easily fall. Regardless, investors are much better off taking a long-term view. It is very rarely, if ever, the case that you need to make an investment decision straight away.

5.) Financial Jargon

The final reason why the industry spin machine causes more harm than good is that it often contains financial jargon. At best, jargon confuses investors and over-complicates the investment process; at worst, it can be used to cloud and deliberately mislead. It can exploit people’s lack of financial literacy and give a false impression of trustworthiness and expertise. But the principles underpinning sensible investing are really quite simple, and consumers should place their trust instead in firms that simplify investing and explain how it works in clear, concise language.

Who can be Trusted?

You may be wondering, “If I can’t trust financial companies to tell me what’s best for me as an investor, who can I trust?” Continue Reading…

Why it’s never too late to Invest your Money

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Worried you’re behind the “Magic 8 Ball” when it comes to investing in retirement savings? If your retirement fund is a bit anemic (or nonexistent), there’s no time like the present to get started! It’s never too late to invest your money but do you know where to start? Will explore active, passive, and wise investment options in this quick guide to your financial freedom.

Adobe image courtesy Logical Position

By Dan Coconate

Special to Financial Independence Hub

Investing is often seen as a young person’s game. But the truth is, it’s never too late to start investing your money.

This is especially relevant for retirement planners and seniors. Whether you’re planning ahead or looking to make your savings work harder, investing can play a crucial role in your financial future. Below, we take a closer look at why you should start investing, what to look for when you invest, and how to prepare your family for the future with this wise financial decision.

Is it really never too late to Invest?

Many people think investing is only for the young. But countless success stories prove otherwise. Take Colonel Sanders, for example. He started Kentucky Fried Chicken (KFC) at the age of 65. Another prime example is Ray Kroc, who expanded McDonald’s in his 50s. These stories highlight that it’s possible to achieve financial success later in life, including when you think it’s time to retire.

Certain investments work for different age groups, which makes it easier for seniors to start investing. For instance, dividend-paying stocks offer a steady income. Bonds provide low-risk options suitable for conservative investors. Even real estate is a lucrative investment at any age.

Starting later can be just as rewarding as investing early. The key is finding the right opportunities. By doing so, you can make your money work for you, irrespective of your age and stage in life.

Active vs. Passive Investments

Active investments require regular attention. Examples include actively managed mutual funds and day trading. These investments aim to outperform the market. They need more effort but can offer higher returns.

Passive investments, on the other hand, are more hands off. Index funds and ETFs are good examples. These options track market indexes and require less management. They are ideal for those who prefer a simple approach.

Understanding the differences between active and passive investments is important. By knowing your options, you can choose the one that suits your lifestyle and risk tolerance. Whether you prefer to be hands-on or hands-off, there’s an investment strategy for you.

Benefits of Investing at a Later Stage

Investing later in life offers long-term financial security. It helps grow your money and secures enough funds for retirement. A well-planned investment can provide a steady income stream and offer peace of mind. Continue Reading…

Introducing Harvest High Income Shares: Top U.S. Stocks and High Monthly Income

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By Ambrose O’Callaghan, Harvest ETFs

(Sponsor Blog) 

On Wednesday, August 21, 2024, Harvest ETFs introduced another innovative product in its growing lineup: Harvest High Income Shares ETFs.

These single-stock ETFs invest in top, well-favoured U.S. stocks, with a focus to provide high income every month from covered call writing.

The Top U.S. Stocks in Scope

Eli Lilly. A dominant global pharmaceutical manufacturer and distributor.

Amazon. A global e-commerce giant that has established a massive logistics network and an innovator in enterprise cloud computing.

Microsoft. A global leader in software services and solutions, as well as hardware technology.

NVIDIA. Established as a huge force in the semiconductor industry, with its graphics processing units (GPUs) at the forefront of the AI revolution.

These U.S. stocks are well known and sought after. They are four of the largest and most widely held stocks in today’s market. They offer a significant building block for covered call writing strategy, in that the shares of these massive companies have very deep and liquid option markets. Further, the level of volatility that accompanies the share prices is high. That makes these great stocks for Harvest’s active and flexible covered call writing strategy.

The Harvest Process:  Strong focus on High and Reliable Income every month

Record matters, and Harvest has it. For 15 years and counting, Harvest has pursued an active covered call writing strategy focused on generating high income, every month for investors in its Income ETFs lineup. Supported by its proven covered call strategy, Harvest has delivered nearly $1 billion in total monthly cash distributions over its 15-year history to investors.

This new, innovative product line, focuses on investing in shares of a single company targeting the largest, most widely held U.S. stocks. Harvest’s investment team — with a combined six decades of investment experience — will use Harvest’s well-established covered call writing strategy to provide high monthly income to investors while delivering on what sets Harvest apart;  that is, ensuring that investors enjoy not just high, but consistent, stable, predictable, and reliable income each month.

The premium income from covered call writing can be treated as capital gains. That means the high income that the Harvest High Income Shares ETFs seek to provide can be regarded as being among most tax-efficient income. The Harvest High Income Shares  ETFs are organized as Canadian Trust Units and are available in Canadian and U.S.-dollar-denominated Units. As open-end mutual funds listed on an exchange (“ETFs”), on the TSX, they provide trading and reporting flexibility for Canadian investors.

Innovation, High Monthly Income, and Upside

The covered calls strategy used in the Harvest High Income Shares  ETFs will operate with up to 50% write level. Harvest’s portfolio management team has stress tested these equities with an average 2-year implied volatility. It found they can produce high levels of income at much lower write levels. Therefore, a 50% write level, in their view, provides a conservative floor to ensure unitholders will be able have reliable high-income generation every month. Continue Reading…