Last week, we covered new and evolving trends in financial markets, including changes investors should embrace when market preferences shift. As financial advisors, we equally discourage excessive trading and static “buy and hold” portfolio neglect. Both carry “opportunity costs” and may result in leaving money on the table.

However, staying true to a predetermined portfolio design does not mean it has to remain stagnant. Planning and performing substitutions among and between asset classes according to developing investor preferences, over a long investment horizon, can bolster the creation of wealth.

Fortunately for everyone (including us), many investors rely on financial advisors to monitor trends and provide information. Our main mouthpiece is the Van Wie Financial Hour radio program, which provides us a weekly platform to share what we are witnessing in markets.

Live radio also affords the public an opportunity to comment and question in real time, using the telephone lines that are provided at no cost to listeners. Since the beginnings of the Van Wie Financial Hour in 2015, our policy has been to prioritize callers ahead of our own discussions. We also provide answers to questions submitted via email or text to Strivus Wealth Partners, the owner and sponsor of the show.

For many months, shifting preferences have been especially evident in the Technology Sector. While there is no one date where Artificial Intelligence (AI) became available to the public, the major event that changed market preferences was the launch of ChatGPT in 2022. Unsurprisingly, AI’s accessibility was met with guarded, but significant, optimism. With increased usage, demand for semiconductors (“chips”) exploded, driving growth among big chip manufacturers, including Nvidia (NVDA) and Taiwan Semiconductor (TSM). Their stock prices soared. Until they didn’t.

NVDA’s stock fell sharply in a short time, and that volatility upset many investors. Far too many stockholders had bought into the steep rise, and some bailed out when the sudden decline became a pattern. These people were chasing returns. Many lost significant value by purchasing a hot stock, followed by making panic sells well into the decline. Buy high, sell low = bad idea.

An offshoot of the AI craze has been rising popularity for the Utilities Sector, as demand for electricity has created opportunities. Increasing portfolio allocations to participate in this growth industry has been rewarding.

Several studies (some still ongoing) are revealing that long-term investment results increase with a competent advisor, adding about 2% to 3% average annual returns. Diligence is often its own reward, and we can help.