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New Pathstone Wealth Management Report Focuses on AI’s Transformative Potential, but is it ‘Rational Interest or Irrational Exuberance?’
New White Paper, by Pathstone Partner Alex Hart, Spotlights Advancements in Artificial Intelligence and its Potential, and Danger
Rapid advancements in artificial intelligence, like those in ChatGPT, OpenAI, and Bard from Google, is spurring a wave of innovation and new growth opportunities, but they come with some big warning signs for investors too, according to a new report by Pathstone Wealth Management based here.
The report, authored by Pathstone partner Alex Hart, details the advantages and innovations, but also warns of an “overdone excitement” that so often accompanies the introduction of new technologies.
“Investors, particularly entrepreneurs, are often interested in hot trends,” writes Hart in the paper’s opening. “In looking at the drivers of U.S. stock market returns in 2023, we see that much of this performance has been driven by excitement around the potential for advancements in artificial intelligence technology,” Hart writes. “Seven technology- and AI-related stocks drove all of the S&P 500’s rally this year through May, with the rest of the index averaging a negative return.”
The Pathstone paper offers insights into lessons-learned from past technology cycles and offers recommendations when chasing “speculation” in new technologies, like AI, blockchain, and other headline grabbing “tech.”
The white paper reminds readers expectations for leaps in technology are often misunderstood due to their complexity, which “leaves the door open for short-term irrational exuberance that doesn’t always translate into long-term success,” Hart says.
Innovation leveraged the right way, however, can drive positive change and spur additional capital investment for growth, the paper says.
“We expect that this cycle of innovation will contain both winners and losers, but we are optimistic for the benefits these technologies can bring if implemented with proper governance,” Hart states.
The insights from Pathstone are part of a series of papers that insights on the state of the economy and how our leaders are helping, or hurting, the country’s largest employer, America’s family businesses, according to Pat Soldano, President of Family Enterprise USA and Policy and Taxation Group.
“This report is especially useful to those trying to make decisions on investing in these new technologies,” said Soldano about the Pathstone paper. “The Pathstone White Paper offers some serious background and recommendations into how AI can help family businesses, and entrepreneurs in the very near future,” she said.
Pathstone is an independently owned and operated wealth management firm serving multigenerational families with complex needs, single-family offices, and foundations and endowments. Our comprehensive range of services and deep expertise goes far beyond investment management. Every client has different values, goals, and objectives. No two paths are the same. Our expansive capabilities and personal, in-depth approach enable us to customize our solutions and leverage best practices to accommodate each of our client’s unique needs. It’s what makes us Pathstone – The Family Office.
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The need for fact-based reporting of issues important to multi generational businesses and protecting a lifetime of savings has never been greater. Now more than ever, multi generational businesses and family businesses are under fire. That's why Family Enterprise USA is passionately working to increase the awareness of issues important to generationally-owned family businesses built on hard work, while continuing to strengthen our presence on Capitol Hill. The issues we fight for or against with Congress in Washington DC include high income tax rates, possible elimination of valuation discounts, increase in capital gains tax, enactment of a wealth tax, and the continued burden of the gift tax, estate tax and generation skipping tax.
Family Enterprise USA promotes generationally owned family business creation, growth, viability, and sustainability by advocating for family businesses and their lifetime of savings with Congress in Washington DC. Since 2007, Family Enterprise USA has represented and celebrated all sizes, professions and industries of family-owned enterprises and multi-generational employers. It is a bi-partisan 501.c3 organization. Family foundations can donate.
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