Investing in AI stocks

Happy Monday, wealthy people! 

While I sip my frothy latte this morning, I can still feel the contagious energy from last week’s event on Artificial Intelligence funds and ETFs. The attendees asked a lot of questions, which made the conversation all the more meaningful. Our community is a safe/ welcoming space for ANY finance-related question.

What questions do YOU have? Respond to this email to let me know.

Stay tuned for an exciting announcement coming your way soon 🙂.

P.S. Got skills for a fast-growing startup? Drop us a line!

In today’s email:

👉 Stock Market Update - New Market Highs

👉 Wealth Building Strategies - Investing in AI

👉 Ask Me Anything - Can Europeans buy US ETFs?

👉 Sip of Learning - Expense Ratios

Grab your latte and let’s get started!

Margarita T., CFA

Founder, Finance Latte

WEALTH BUILDING STRATEGIES

Investing in AI

How do you invest in AI related companies? Here are 3 ways to do this:

1) You could buy AI-related stocks. Stocks in AI Research, the Chip Manufacturers, Robotics, etc. Below are some examples of companies involved in each segment. (Not recommendations!) The companies in black font, like Mistral and Open AI are private, which means they cannot be bought on the stock exchange.

🚨 NOTE: these are the obvious players. Pretty much everyone talks about them, and their stock prices reflect that (i.e., they are expensive).

Source: Finance Latte. Not investment recommendations to buy, sell or trade these securities in any way. Investing involves risk, including loss of principal.

2) You could buy an Index Fund that invests in a basket of Artificial Intelligence stocks. It’s hard to know which one stock will be the winner in the AI race… so why not buy an index fund that has a basket of them? If you don’t have a lot of time to do deep research on each company, buying an index fund might not be a bad proposition, as long as:

the index fund’s fee is not too high (<0.5%),

the fund has enough assets (>$100 million), and

investing in this area fits with your unique needs.

3) You could research the lesser-known names in AI. How do you do that? Here’s a pro tip: you can see what stocks are included in the top AI indexes (those that track AI stocks).

An example of one of the bigger AI indexes is the Nasdaq CTA Artificial Intelligence Index. “The index tracks (AI) companies identified by the Consumer Technology Association as an Enabler, Engager, or Enhancer (CTA) of AI.”

Think of this index as a cheat sheet. Someone (Nasdaq) already did a lot of research to find which firms are most heavily involved in AI. It’s not just NVIDIA and Meta in there. I barely recognized many of the stocks.

👀 You can find the list of the index’s top 10 holdings on the NASDAQ website, under “Fact Sheet”. Every index publishes a 2-page Fact Sheet.

🚨 Use this method if you already have a good fundamental skillset on stock analysis and have a lot of time to do the work required to analyze those lesser-known names (which can have more risk).

ASK ME ANYTHING

Question: “Can European Investors buy US ETFs?”

– Cindy Z.

Answer: “Generally, no, Europeans can’t easily buy US ETFs ever since the EU passed the MiFID 2 & PRIIP regulations in 2018 (p.s. no, you don’t need to know what these stand for 🙃). As a result of these laws, ETFs sold in Europe need to have additional documentation, including information in each country’s language, and many don’t have that.

Big ETF providers like Vanguard have created ETFs for the European markets.

Please note that this does not mean you can’t buy ETFs that INVEST in the US (there are plenty of those sold in Europe–check JustETF.com). It just means you can’t buy ETFs SOLD in the US, which could invest anywhere.”

– Margarita T., CFA

Got a question for me? Ask it by simply responding to this email.

BINGEWORTHY

🗞️ Article: Japan’s long comeback.

🎬 Documentary: Shiny Happy People chronicles the rise and fall of the Duggar family (the ones with 19 kids) and the fundamentalist cult, Institute in Basic Life Principles behind them. The word “unsettling” doesn’t do this justice.

📚 Book: Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required. An inspiring read of self-made millionaire Kristy Chen, who retired at age 31.

👩‍🎓 Free Resource: Try our Introduction to Investing digital course.

Finance Latte AB is not a registered investment advisor. This content is for informational purposes only and should not be interpreted as investment or tax advice. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice. Past performance does not guarantee future results. Market indexes are unmanaged and cannot be invested into directly and are not meant to depict an actual investment. From time to time Finance Latte AB might include affiliate links in its newsletter or website where we might earn a commission if you subscribe to a publication, or purchase a product you found through us at no extra cost to you. We will not promote any type of investment product, and will only include non-investment/non-finance services or products we believe in. View our Privacy Policy and Terms of Service.

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