Beyond the AI Trade

Doug Walters, CFA

Artificial intelligence has become one of the most powerful forces shaping markets today. While we continue to manage the investment risks associated with AI-related market concentration, we are also embracing AI as a tool to enhance research, planning, communication, and client service. This week, we share how Strategic is using AI to help us better serve our clients while staying true to our evidence-based approach to investing.

Contributed by Doug Walters, David Lemire, Max Berkovich, Matthew Johnson

As investors, we have been thinking quite a bit about AI. Not because we are trying to predict which company will be the biggest winner, but because AI themes have become such a large part of many market indexes that they have created meaningful concentration risks within portfolios.

Our response has been to manage risk thoughtfully. In our strategies, we have trimmed certain exposures, diversified where appropriate, and sought ways to maintain participation in trending themes without becoming overly dependent on a small number of companies. Our goal is not to predict which AI-related businesses will succeed or fail. It is to build portfolios designed to participate in long-term growth while remaining resilient if market leadership changes.

That is one side of the AI story. The other is that AI is enhancing our ability to serve clients across investments and financial planning.

History teaches us that transformative technologies do not always translate into straightforward investment opportunities. Railroads, the internet, and smartphones all changed the world, but investors still had to navigate periods of exuberance, changing leadership, and lofty expectations. The investment story around AI will likely follow a similar path. The technology, however, seems likely to continue delivering benefits to those who learn how to use it effectively.

Within Strategic, AI is increasingly helping us work more efficiently and serve clients better. We use it to assist with drafting and refining communications, organizing meeting notes, accelerating research, exploring tax and estate planning questions, and helping team members quickly locate information and resources. This is almost certainly just the beginning. We are discovering new applications every week.

For me, there has not been one “killer application.” Instead, it is the cumulative effect of many small improvements across dozens of daily activities. Each enhancement creates an opportunity for deeper and more effective client service.

One simple example is meeting notes.

Historically, advisors have had to balance two competing priorities during client meetings. They want to be fully engaged in the conversation while also capturing important details and follow-up items. AI can help close that gap. By assisting with meeting summaries and documentation, AI allows advisors to spend less energy focused on note-taking and more energy focused on listening, asking questions, and understanding what matters most to clients.

We are seeing similar benefits across the firm. Research can often be synthesized more quickly. Our planning professionals can explore tax and estate concepts more efficiently. Internal Strategic knowledge is easier to access. Content can be drafted, refined, and reviewed more effectively.

Our interest in AI is rooted in our core values: Serve. Grow. Live. In particular, Grow.

To continue providing exceptional experience, we must continue to grow. That means learning, evolving, and investing in tools that allow us to better help our clients reach for their great life. We believe AI is one of those tools.

The investment story surrounding AI will continue to evolve, likely with plenty of volatility along the way. But from where I sit today, one thing is already clear: AI is helping us enhance our research, planning capabilities, and overall client experience.

The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.
Alvin Toffler

One thing to watch

Last week’s earnings reports from Alphabet, IBM and Intel showed what can happen when expectations are very high. All three shares fell. Alphabet is investing heavily, along with others, in AI infrastructure. Time will tell if its money well spent.

Next week, we’ll have our eye on the PCE inflation report and the Fed. inflation will likely come down, as it does not reflect the recent resurgence of oil. The Fed is expected to keep rates on hold.

About Strategic

Founded in 1979, Strategic is a leading investment and wealth management firm managing and advising on total client assets of over $3 billion, as of 6/3/26.

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Beyond the AI Trade

One thing to watch

About Strategic

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