Just Let AI Do Your Investing for You

The news was kind of bad this week (economy not adding many jobs), but the market soared to a new all-time high for the S&P 500, the Russell 2000 and the Dow Jones Industrial Average. Interestingly, the NASDAQ-100 and the Technology sector did not. Last week, I shared a review of July for the 88 ETFs that I track.

A Look at the Market

The S&P 500 has returned 14.0% with dividends included, and the price is up 13.4% for SPDR S&P 500 ETF (SPY) in 2026 so far. This leaves the market on track to post a return for the full year above 20%. At the same time, iShares Core US Aggregate Bond ETF (AGG) has declined in price in 2026. With dividends included, the return has been 0.0%, which is well below cash.

This week, I saw many advertisements by firms that use AI for investment management, and I wrote about these companies three times. First, I called it out here, then I wrote an article on the New Cannabis Ventures website, and then I wrote another one here. Here are the articles:

1. Should You Get an AI Investment Manager?

2. Unethical Advertisements for Investing Using AI

3. AI Investment Management: Be Careful

I am all over this, but I am not the only one who is intrigued. I am very happy to see the CFA Institute all over AI. In July, it issued a report on AI and the future of finance and discussed it as a framework for structural change. From this article on the publication, here it is "at a glance":

So, the investment management industry needs to be paying attention to AI. Yes, it is a threat, but it is also an opportunity. Just today, in a weekly Enterprising Investor Blog piece, it discussed how many asset managers are using AI but not turning it into "alpha" for their investors.

Things have really changed for investors during my life, which is not so many years. I was born in 1965, and people who wanted to invest in stocks had really one choice: buy stocks from a stockbroker. There were mutual funds, but John Bogle of Vanguard didn't introduce a retail index fund until 1976. The first ETF was created in 1993. These are both very large now, as are separately managed accounts (SMAs), where an adviser manages your money for an annual fee as a percentage of the assets.

The idea of being a do-it-yourself investor didn't really take off until 1975, when fixed commissions were abolished by the SEC. Commission-free trading began in 2013 (thanks, Robinhood!) and became mainstream in late 2019 right before the pandemic hit.

I don't watch TikTok at all, but I am aware of many people trying to influence retail investors there for a while. I have been watching closely how several companies are accelerating their use of social media to push their AI investment management firms and have called out some of them. I am looking at several others too.

AI can be very helpful, but it is not a magical solution to anything. I am addressing investments here, but it does not replace doctors, lawyers or other professionals. As it relates to investments, AI can help investors. I have been using stock screeners for decades, and AI can really help that process. It can't predict the future with certainty. As Michael Schopf, an experienced global portfolio manager who runs his own early stage venture fund since 2006, suggests in that Enterprising Investor Blog piece today, it can widen the breadth of research, shorten the time and do some other things to help, but it is not a portfolio manager. HIs main point was this: "The more AI you use, the more human judgement matters, not less."

Many of the firms that I have criticized lack the human personnel to make a difference for their customers. I don't intend to be so negative, and I am hopeful that the way people invest their money continues to be less expensive and more productive. I expect that many current investment managers will move to improve their operations through using AI and that their returns get better relative to the overall market. I believe that this is where the world is headed, but that doesn't mean we are there yet. I hope that readers are cautious about these abundant offers of rapid success being offered on social media.

ETF Model Portfolio Update

This ETF model portfolio, which is measured against 60% SPY and 40% AGG, is up relative to its benchmark. This week, I did one trade, which was published on here instead of on my Seeking Alpha blog. For those who would like real-time alerts (free of charge for now), just subscribe to the blog.

I posted no articles on ETFs or stocks this week, though I wrote a lot about AI Investment Management!

Going into the week, my model portfolio equity exposure totaled 25.6%, spread out across two ETFs. Here is what I did this week:

• Wednesday: I added to iShares TIPS Bond ETF (TIP).

  
  

Here is the current model portfolio, which now has 25.8% equity exposure in two ETFs and fixed income exposure in four ETFs that totals 72.7%:

I have been wrong this year, at least so far, as stocks keep rallying. The rally had been until Friday nine weeks ago (June 5th), when stocks had their worst day of the year. Since then, the S&P 500 has made a new high. Small-caps did again make a new high this week too. Despite being underweight stocks all year, my return relative to the 60/40 index is higher by about 5.3% in seven months. While the S&P 500 rose this week and the Aggregate Bond Index fell again too, this model portfolio was down slightly during the week.

The year-to-date strong relative performance is not due to superior returns on my current equity ETFs. My TIPS ETFs have done okay relative to AGG, but they aren't exactly boosting the return. VGSH isn't helping too much either. So, what has it been? I have had positive returns from three ETFs, two of which I no longer hold and one of which is down a lot year-to-date that I just repurchased recently, and there has been some good trading.

How Can I Help You?

I enjoy analyzing ETFs and stocks, and I like sharing my thinking in writing. I am considering starting a subscription service or joining one that is already being published. What things would you as an investor like to see offered?

If you are an investment professional, I would like to work with you as well. I can help educate financial consultants about the ETFs, and I can work with management at investment firms to help create model portfolios or potential ETF investments. Please let me know if your firm would be interested in this.

My ETF articles at Seeking Alpha, written under the alias The Intelligent ETF Investor, shared a lot of my ideas. I continue to share those ideas here on this blog.