Artificial intelligence and investing

Artificial intelligence (AI) has captured the public's imagination. In a few short years, this technology – which describes the capacity of machines to simulate human intelligence – has become more than just a curiosity. It's now integrated into daily life and corporate operations.

What opportunities does AI present to investors?

When it comes to investing, AI offers the following opportunities:

Both AI tools and AI investments may fit into your overall strategy for achieving financial fulfillment.

What is financial fulfillment?

Financial fulfillment isn't about being wealthy. It's the satisfying feeling that your finances are aligned with what matters most to you – for example, freedom, confidence and forward momentum. Canadians surveyed for the Edward Jones/Gallup poll most commonly define financial fulfillment as having freedom to pursue passions (47%), less stress about money (38%) and more time with family and friends (35%).¹

One reason financial fulfillment is important is that it correlates with thriving mental and physical health and satisfying family relationships and community connections. In concrete terms, financially fulfilled Canadians are much more likely than financially stressed Canadians to have emergency savings (97% versus 41%), savings for a major expense or life event (89% versus 26%) and a financial plan for retirement (83% versus 30%).¹

Surprisingly, only 12% of Canadians said they're financially fulfilled. Far more described themselves as financially stressed (41%) or financially conflicted (47%). Still, it's a goal worth striving for as you incorporate aspects of AI into your financial plan.¹

Using AI tools to invest

When you enter a prompt, an AI tool synthesizes information from across the Internet into a concise answer. Using an AI tool is a quick way to check the prevailing wisdom on a specific topic. Seeing conclusions drawn from vast amounts of data can help you identify trends. Results may also raise important questions that lead to further research.

However, while an AI tool can be a great starting point, it shouldn't be the only source of information you use to choose investments and financial strategies. Not all content on the Internet (the source for AI answers) is accurate. Also, AI can "hallucinate," or make up information, when it doesn't find an answer. In addition, AI's consensus view could work well for some but not for you.

That last point is important in the context of financial fulfillment. Feeling financially fulfilled is about alignment with your priorities, so it's very personal. Yet the answers an AI agent finds may or may not be relevant to your distinct situation. Following advice that isn't relevant to your unique goals, values and circumstances won't result in alignment.

The alignment mismatches may go some way toward explaining the tension many people experience between using AI for financial guidance and trusting it. In the Edward Jones/Gallup poll, 71% of all Canadians say they have a low level of confidence in AI's ability to provide financial guidance. Just 4% trust AI "a great deal."¹

One of the best ways to use an AI tool is as support for human advice from a professional. AI can give you a general understanding of areas of the investment market to investigate in more depth with an expert. It can also get you up to speed on financial planning concepts and highlight potential weak points in your own plan to discuss and address. Then you can take the knowledge you've gained from interactions with an AI tool to a financial advisor, who can work with you to create a customized, aligned financial plan that helps you achieve financial fulfillment.

Can AI replace a financial advisor?

AI and financial advisors are good at different things. Rather than choosing one or the other – framing the problem as financial advisors versus AI – why not use both?

How can you invest in AI? 

AI is a fast-growing disruptor that is unlocking efficiency improvements across many industries. Canadians can tap into AI's growth potential by investing in pure-play companies or AI-enabled companies.

Before you dive in, consider how investing in AI aligns with what matters most to you. Some people thoroughly enjoy embracing innovation, progress and fast-paced growth. Others find it stressful. Your investments, like your financial plan, should reflect your preferences and priorities. They're an important part of your journey toward financial fulfillment.

An Edward Jones financial advisor can be a valuable resource as you decide how to get AI exposure, while maintaining a diversified portfolio aligned to your values.

A financial advisor can be your financial fulfillment partner 

If you aren't yet one of the 12% of financially fulfilled Canadians, consider working with a financial advisor. In the Edward Jones/Gallup poll, 74% of financially fulfilled Canadians had asked a professional financial advisor for guidance within the past year, while just 26% of those who described themselves as financially stressed had done the same.¹

Adjusted for age, gender, net worth and household income, financial advisors had the strongest positive association with financial fulfillment.¹

One reason may be that partnering with a professional to create a financial plan provides people with greater confidence about where they stand today and whether they're heading in the right direction. There's a sense of peace that comes from knowing you're doing the most with what you have and are on a course toward financial security.