The new AI craze has many investors wondering where to put their money. Liz Ann Sonders, Managing Director and Chief Investment Strategist at Charles Schwab, joined TheStreet to offer a solution. Rather than investing in individual stocks, she suggests focusing on sectors that are embracing AI to benefit from its full potential.
Transcript:
SARA SILVERSTEIN: And what’s your advice to your clients and investors right now as far as how they should position from a sector basis or, you know, given the current market dynamics?
LIZ ANN SONDERS: Yeah so from a broader asset allocation perspective, you know, Schwab is $9 trillion of client assets. So we don’t tend to suggest a lot of movement around in terms of your strategic asset allocation and exposure to equities. That’s going to depend on where you sit on the risk spectrum, what your time horizon is, need for income, you know, et cetera. et cetera. But within the equity portion of the portfolio, we think you want to take a combination of both a sector approach, but also a factor approach. Factor is just another word, of course, for characteristics. So we have outperform ratings as of this moment on financials, energy and materials, and we have underperform ratings on REITs and consumer discretionary.
CONWAY GITTENS: So sometimes there’s a mismatch, right, between what the skills that the employer wants and the skills that or the jobs that the graduates want. Yes so talk to me about the kind of industries that are seeing the most attention from college graduates?
JULIA POLLAK: So the biggest skills mismatch that we see is actually in areas like the skilled trades. There is sort of an inexhaustible demand for people with skilled trades experience. And there are actually very few candidates developing those skills. Now we are seeing that those market signals are starting to get across to young people. And we’ve seen a recent uptick in enrollments in vocational training programs, but it’s not nearly enough to quench the demand of employers.
Young people want to go into marketing. They want to go into communications. They want to go into these white collar fields that are fun, flexible, remote, but also where employers are pretty slow to hire at the moment, one just because of market conditions, but two, because they’re dabbling around with AI and wondering whether perhaps they can replace these entry level employees and have their superstars do more with these new incredible tech tools.
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