The Week That Is
Why A.I. terrors, bond concerns and long-term inflation aren't real scares
With the tide of headlines shifting from artificial intelligence solving the world's problems to being a menace that threatens humanity, Vijay Marolia , chief investment officer at Regal Point Capital, says the real story is about controlling narratives and development, and that the tide is not shifting to one that will upend the A.I. story. Vijay discusses how some of the industry's powerbrokers are trying to create "regulatory capture," using rules where the real purpose is to protect their current competitive advantages. He says the real risks to the strategy are that it slows development and acceptance of the A.I. buildout. Marolia also discusses the sudden rise in bond yields, which has sent bond prices falling and which he says has made it that investors should be concerned about using bond funds, noting that they do not protect against capital loss, particularly in rising-rate environments. Instead, Vijay suggests holding bonds directly, planning to capture the return to maturity, and using a laddered approach so that higher-rate paper is routinely being added to the portfolio as rates climb. Plus, Vijay talks about the rise in 401(k) millionaires, and how it's more a phenomenon of market growth and inflation than a meaningful milestone. He notes that investors today should expect to reach that kind of landmark simply due to the impacts of inflation over time, noting that they overcome that inflation by investing in stocks for the long term and focusing on their savings level and their needs rather than their account balance.
