May 22, 2024
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Guest commentary: Making lemonade out of lemons


By John Grace

There’s a stark divide among experts regarding the future of artificial intelligence (AI). While some see it as a surefire path to wealth, others are gripped by the fear that it could become our master. 

We accept that AI enables machines to perform advanced, humanlike functions and promises breakthroughs in health care, transportation, education, finance, and beyond.

As I reported in my last article, according to a study by the American College of Financial Services, only 31% of pre-retirees and retirees could be considered financially literate. 

Such a grade makes for a solid F. 

The researchers were astonished to find that when ChatGPT posed the same 35 study questions, the score was just 45%. 

ChatGPT passed both the CFA and CPA exams. 

Whether or not you like or understand AI, AI depends on data centers that run 24/7, 365 days, no matter what. 

Data centers are the backbone of the digital world, where businesses store and process their critical data and applications. 

Without water, data centers are centralized facilities meticulously designed to house and manage an organization’s IT infrastructure. 

These centers go beyond mere storage; they serve as the nerve centers of an organization’s digital operations, housing servers, networking equipment, storage systems, and more.

This information helps identify an investment position that may help your portfolio stand up no matter how the markets gyrate. 

If you like real estate, it may be a good time to lighten up on owning single-family homes and diversify into student housing, multi-family dwellings, affordable housing, industrial, and data centers, concentrating in the Sun Belt outside of California.

Why now? Real GDP crashed more in each recession since 1990.

As I said earlier this year, Dent Research clarifies the future. 

“This will be a worldwide real estate crash after a global bubble. There will be nowhere to hide. China’s real estate will go down as much as 70%; ours, on average, will go down as much as 50%,” the report read.

“People aren’t going to want to buy anywhere for a while, and that’s why real estate will be much slower to bounce than stocks. Stocks took 17 months to reach the bottom in the 2008 crisis. Real estate took six years.”

Only time will tell if this forecast comes true. 

But those who take chips off the table can have more legs under their portfolio stool as they keep their powder dry and catch the next wave.

Instead of telling you that you must live with losses, you might like to see how you may limit your losses.

John Grace is a financial planner and president of Investor’s Advantage in Thousand Oaks.