DIY Investor Magazine issue 42

DIY Investsor Magazine issue 43

Computer says ‘maybe’…

Those of you that don’t habitually walk around with a bag on your head, will have noticed that there is rather a lot of ‘noise’ and no little excitement around artificial intelligence (AI) just now.

Those in the know will tell you that it is, without doubt, the biggest threat/greatest opportunity in town.

Supporters predict that over the next decade, AI will add £7,000,000,000,000 to global GDP and improve all aspects of human endeavour; detractors warn of a long-term existential threat to mankind from advanced, uncontrollable superintelligence.

Acknowledging that AI is still in its infancy, and that the wisdom it dispenses is only as good as the questions it is posed, it is tempting to be slightly cynical and question why nobody thought to ask ‘would Peter Mandelson be a good choice as US ambassador’?

Or wonder what advice FOMO-frenzied bitcoin investors received when the currency peaked at $126,000 in October 2025; today it is worth $63,000.

In this issue we hear from Allianz Technology Trust, and the eyewatering sums of money that are being poured into creating AI infrastructure.

Again, opinion is divided – supporters see the massive capital expenditure as reason why the ‘bubble’ won’t burst; detractors such as Arvind Krishna, CEO of IBM, say that the cost of a 3 GW data centre at anything up to $240 billion, means they will never be profitable.

Despite 61% of UK retail investors believing valuations are stretched, 67% plan to maintain or increase their exposure to AI, viewing it as a long-term growth story rather than just a trend.

Enthusiasm is high—particularly among Millennials and Gen Z— and investors are navigating the risks of a potential AI ‘bubble’ by diversifying into infrastructure plays like data centres and energy and looking for the next-big-thing in adopting the technology.

With the application of AI technology, the future of financial advice will be hybrid: AI providing speed, scale, and precision with humans providing perspective and empathy – dubbed ‘human-machine teaming’.
Retail investors have embraced AI technology, with a 2025 press release from eToro announcing ‘Retail investors flock to AI tools with usage up 46% in one year’.

This shift is driven by the desire for faster research, better decision-making, and lower costs compared to traditional fund managers; 80% of millennial investors and 79% of Gen Z have turned to AI to help build portfolios.

The phenomenal number-crunching power of AI reduces the time spent on research, provides advanced analytics to individual investors that were previously only available to institutions, and hyper-personalisation as new tools allow investors to build customised, bespoke indices based on specific criteria.

However, unlike advised clients, retail investors do not have easy access to those performing what Vanguard describes as ‘empathy-driven tasks’ – work that depends on understanding human behaviour, guiding emotions, and building trust.

AI makes ‘right’ decisions based on the information it is fed; it would not be difficult to imagine there being a ‘best’ portfolio for an investor based upon their personal circumstances and objectives.

But this is where DIY Investor comes in.

The content it provides is broadly divided between ‘explainers’ ‘experience’ and ‘expert’.

Financial education – ‘explainers’ – remains crucial and is the way to engage the next generation of investors.

‘Experience’ is how do people like you behave and respond to changing circumstances?
‘Expert’ could come from seeing a glint in the eye of the manager of one of the new ‘Active ETFs’ in a video in which he outlines his strategy to ‘outperform’.

DIY Investor has embraced a hybrid model for over a decade.

See DIY Investor Magazine issue 43 here >