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Slick TV ads often make financial planning and wealth management sound simple, but it’s usually not. Managing wealth requires knowing a lot about highly technical topics, like taxes, government regulations, and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights some of the knowledge needed to manage wealth and why it’s often so daunting without the help of an independent personal financial advisor who is familiar with your situation.
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Understanding The Federal Reserve Mandate To End Inflation
The Federal Reserve System, the nation’s central bank, has a dual mandate to pursue maximum employment and maintain price stability. These two priorities are currently treated equally, but that was not always the case. In fact, the Fed’s bias toward maximizing employment was a critical driver of the stagflation that plagued the U.S. in the late 1960s and 1970s. Recognizing the need to balance price stability and maximum employment, in 1977, Congress revised the Federal Reserve Act.
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Fed Governor Kugler Details Inflation And Economic Outlook
The 12-month inflation rate, as measured by the personal consumption expenditures (PCE) index, was 2.6% in December, down from its peak of 7.1% in June 2022, and the six-month rate for PCE inflation was even lower, at 2%, which is the target rate set by the Federal Reserve.
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Why Rates May Not Be Cut Until June
The cost of a loan to buy a home, car, college education, and achieve the American Dream is staying the same for now. As expected, Federal Reserve Chairman Jerome Powell said the central bank did not lower loan rates following the Fed’s Wednesday, Jan. 31, 2024, policy meeting.
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Practical Suggestions For Achieving Your 2024 Resolutions
New Year’s resolutions usually fail because they‘re often too hard to achieve. After six months, only 10% of people who make resolutions achieve them or remain committed to them, , according to a study by Dr. Mark Griffiths, a Chartered Psychologist and Distinguished Professor of Behavioral Addiction at the Nottingham Trent University. What can you do to make financial, medical, or other personal resolutions more likely to be achieved?
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A Sign Of Progress In Solving U.S. Economic Problems
The Federal Reserve appears to be pulling off a feat most experts did not believe it could: ending its aggressive inflation-fighting campaign of 11 interest rate hikes without tipping the U.S. economy into a recession.
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Fed Keeps Rates Unchanged; Expects Easing In 2024
To promote transparency and free markets, the Federal Reserve System began publishing the opinions of the 19 U.S. central bankers that decide interest rate policy.
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Have You Logged Into Your Social Security Account?
Have you logged in to your Social Security account? Creating an online account at SSA.gov is an important first step in understanding your retirement income situation. However, only about 60 million of the 160 million individuals in the U.S. labor force who have Social Security accounts have created a way to access the Social Security Administration’s website.
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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
All year long, the economy and stock prices have fooled experts and consumers, outperforming expectations month after month.
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Test Your Financial Planning IQ
The five questions below are a challenge meant to allow you to assess your knowledge of investing, tax and financial planning. If you have been following our news stream, this quiz draws on familiar ground. The answers are below.
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Planning Briefs
Three Implications Of Artificial Intelligence For Personal Financial Planning
Published Thursday, May 18, 2023 at: 5:03 AM EDT
A quarter of the tasks performed in 2023 by American workers are expected to be automated by Artificial Intelligence (AI) by 2030 and U.S. labor productivity is expected to surge. The U.S. labor force is about to be reshaped. Here are three implications of AI on personal financial plans.
Manias And Bubbles. From tulips to cryptocurrency, financial history is replete with manias and bubbles sparked by the next big thing. AI investments could become wildly overpriced, just like what happened in the dot-com stock crash of 2000. AI is different from cryptocurrency mania. Cryptocurrency held no intrinsic value. AI is not the same. It is a watershed advancement in expanding knowledge, and it’s led by America. But don’t bet your retirement on it. Valuations of AI investments already have been bid up and a wave of speculative investments is likely to materialize for the next few years.
Complications. AI comes with known complications that pose investment risk, and federal government regulation of AI is likely.
- Hallucination. AI-powered search engines generate answers to user questions by scanning the web, but incorrect information makes AI prone to getting something completely wrong. Although using AI to write a story or computer code holds enormous potential, the current state of the technology, according to experts, invariably gets something flat wrong, and correcting mistakes winds up taking a human as much or more time. Microsoft’s ChatGPT-powered AI search engine chatbot reportedly fell in love with a reporter from The New York Times. It’s going to take time for AI to be reliable enough to replace a professional and the complications pose investment risk.
- Regulation. Sam Altman, the 38-year-old founder of OpenAI, which created ChatGPT, a breakthrough in generative AI, says the U.S. government should oversee introduction of AI used in large-scale apps, including Microsoft’s use of ChatGPT in its Bing search engine. The release of AI technology may be regulated by the federal government, which will complicate investment decisions.
Job Security. AI over the next few years will replace low-skilled clerical jobs before moving upstream to more complex jobs where you must perform more complicated tasks requiring judgment and experience. Unlike layoffs experienced during previous recessionary cycles, the jobs of white-collar workers laid off in the next few years are likely never to return. Those laid off workers will need to look for jobs with a different mix of skills. AI is expected to open new jobs but the nature of work to be done by people in those positions will change. The financial risk posed by shifts in the job market are greatest to workers near retirement age.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
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