In the past two weeks, we have covered the first two keys to investing in 2025. With the markets down over the past month, you may be wondering if we are headed for a massive downturn and recession. If you read all 5 of my keys to investing this year, you will not worry and just use these downturns to add more money to the markets.
The first key was that the US Business Cycle appears to be aging in reverse. The second key was Industrial Renaissance is fueling a new era in growth. If you missed those two, please go to my web page, Jsturniolo.com, and press education, commentaries. All my commentaries are archived in that section of the web page, if you ever miss one in the future.
The third key:
3. AI megatrend could boost stocks for years
Artificial intelligence has captured the minds of the public and investors, conjuring images of a futuristic world completely reshaped by intelligent machines. Overhyped? Probably. Even more opportunities ahead? Also probably true.
That’s because we tend to overestimate megatrends in the short term while underestimating them in the longer term. With some megatrends, such as smartphones or driverless cars, we could reasonably create estimates based on known quantities like global populations or the number of cars.
“But how do we measure the value of better intelligence?” asks Mark Casey, equity portfolio manager for CGGR — Capital Group Growth ETF and The Growth Fund of America®. “One of the most interesting things about AI is that it’s hard to predict how big it will become. Because it can take on a multitude of human tasks, I consider the AI market to be unknowably massive.”
Outside of its tech applications, AI will also create opportunities in some unexpected places. The build-out of data centers requires vast physical resources, including copper, capital equipment and a lot of electricity. Soaring demand for these resources has been a boon for old economy industries including utilities, industrials and mining companies.