Strategic Insights
AI Is Changing the Market. Planning Still Has to Lead.
Artificial intelligence is beginning to influence nearly every part of the economy. For investors, the challenge is understanding the opportunity without allowing a single market theme to replace disciplined financial planning.
Artificial intelligence is no longer just a technology story.
It is beginning to influence nearly every part of the economy: how companies serve customers, manage data, build infrastructure, protect against cyber threats, forecast demand, review medical information, write software, manufacture products, and allocate capital.
Markets are paying attention. Businesses are investing. Investors are trying to determine which companies and industries may benefit, which may be disrupted, and how quickly productivity could improve.
But for SIG clients, the most important question is not, “How do we chase AI?”
The better question is: How do we understand a major economic shift while still letting planning, discipline, and purpose lead the decision-making?
AI may change the market. Planning still has to lead.
AI Is Bigger Than Technology Stocks
It is easy to think of AI as a stock market headline. But the more important story is broader than that.
AI is becoming an infrastructure story. Data centers require power, cooling, chips, real estate, fiber, backup systems, and large capital commitments. The International Energy Agency estimated that global electricity consumption from data centers was about 415 terawatt-hours in 2024, or roughly 1.5% of global electricity consumption, and projects that figure could reach about 945 terawatt-hours by 2030 in its base case.
AI is becoming an energy story, a labor story, a healthcare story, a manufacturing story, a cybersecurity story, and a financial services story.
It may help companies improve speed, service, research, logistics, quality control, fraud detection, administrative workflows, and decision-making. It may also pressure companies to invest more, adapt faster, rethink staffing, and manage new risks.
In other words, AI is not simply a “technology sector” topic. It is becoming a productivity, capital spending, infrastructure, risk management, and business model topic.
That is why markets are trying to figure out how much of this future should be priced today.
The Market Is Trying to Price the Future
Markets often move before the full economic impact is visible.
That can be both useful and dangerous.
It is useful because markets are forward-looking. Investors are always trying to discount what may happen next: future earnings, productivity, interest rates, margins, and growth.
It can be dangerous because expectations can move faster than reality. A real innovation can still become overvalued in certain areas. A powerful technology can still produce uneven investment results. Not every company that talks about AI will create lasting value from AI.
AI may be real. The opportunity may be real. The hype may also be real.
Stanford’s 2026 AI Index reported that organizational AI adoption continued rising in 2025, reaching 88% of surveyed organizations, while generative AI was used in at least one business function at 70% of organizations.
Those are meaningful numbers. AI adoption is no longer just theoretical.
But adoption is not the same thing as profitability. Using a tool is different from building a sustainable business advantage. For investors, the question is not just whether AI gets adopted. The question is who benefits, how much they benefit, how long the advantage lasts, and how much of that benefit is already reflected in prices.
That is why planning still has to lead.
Rates Still Matter
AI may be one of the biggest market stories, but interest rates remain one of the biggest planning and economic stories.
The Federal Reserve held the federal funds target range at 3.50% to 3.75% at its July 29 meeting. The vote was 9–3, with three officials preferring to raise rates by 0.25%. The Fed also stated that inflation remains elevated relative to its 2% goal.
Inflation has improved from prior highs, but it is not fully resolved. The July CPI report showed consumer prices rose 0.1% for the month and 3.4% over the prior 12 months. Core CPI, which excludes food and energy, rose 0.2% for the month and 2.5% over the prior year.
The Fed’s preferred inflation measure also remains above target. The July PCE price index rose 0.2% for the month and 3.7% from a year earlier. Core PCE was up 3.3% from a year earlier.
That is why rates may remain elevated, and they could potentially move higher if inflation does not continue improving. As of August 26, the 10-year Treasury yield was 4.66%, and the 30-year Treasury yield was 5.18%.
Those rates affect more than bonds. They influence cash yields, mortgages, business debt, real estate values, borrowing decisions, retirement income planning, and the valuations investors are willing to pay for future growth.
Higher rates also matter for the AI buildout. AI infrastructure requires significant capital. When rates are higher, the cost of funding new infrastructure, data centers, equipment, and expansion becomes more important.
That does not stop innovation. But it does create discipline.
Rates Can Stay High While Liquidity Is Managed
One of the more confusing parts of the current environment is that the Fed can keep interest rates elevated while also managing liquidity in the financial system.
Those are not the same thing.
The Fed’s July implementation note directed the Open Market Desk to purchase Treasury bills, and if needed other short-term Treasury securities, to maintain an ample level of reserves. It also directed the Desk to roll over Treasury principal payments and reinvest agency principal payments into Treasury bills.
In plain English, the Fed can continue trying to keep inflation under control through interest-rate policy while also using its operating tools to maintain liquidity and market functioning.
That does not mean money is free again. It does not mean rates no longer matter. And it does not mean investors should assume every market concern will be quickly solved by the Fed.
For clients, the planning takeaway is simple: elevated rates still deserve attention. Cash, bonds, debt, income planning, real estate, business financing, and market valuations all need to be reviewed through the lens of today’s rate environment.
The Economy Is Still Sending Mixed Signals
The broader economy is also giving us a mixed picture.
Growth is still positive, but not without questions. Inflation remains above the Fed’s target. Rates are elevated. AI-related capital spending and productivity expectations are strong. At the same time, the labor market is showing signs of cooling.
The July employment report showed nonfarm payroll employment changed little, declining by 23,000, while the unemployment rate was 4.1%. Prior months were revised lower, with May and June employment combined 103,000 lower than previously reported.
The economy is not sending one clean message. AI and capital investment are creating excitement. Higher rates and sticky inflation are creating discipline. The labor market is no longer as strong as it was in prior years.
That is exactly why clients need a plan rather than a prediction.
What This Means for Investors
AI may create real long-term opportunity, but opportunity does not eliminate risk.
A powerful theme can still become overhyped. A real innovation can still take years to show up in profits. And the companies that appear to be obvious winners today may not be the only beneficiaries over time.
Is my plan positioned to participate in long-term innovation without becoming dependent on one theme, one sector, or one forecast?
Accumulation Phase
For clients still building wealth, the focus should be disciplined participation. AI may become a major productivity driver across many industries, but Accumulation Phase clients should not feel pressured to guess the next winner.
This is also a good time to begin preparing for year-end planning, including how new dollars are being invested, whether excess cash has a purpose, whether higher-interest debt should be addressed, and whether tax-loss harvesting, gain planning, charitable giving, Roth conversions, or business-owner strategies should be reviewed before year-end.
Strategic Income Phase
For clients in the Strategic Income Phase, the focus should be income discipline. AI may be part of the long-term growth story, but dollars needed for income, taxes, healthcare, giving, and upcoming expenses should not be driven by market excitement.
This is a good time to review required minimum distributions, qualified charitable distributions, charitable giving, tax-aware withdrawal planning, upcoming tax payments, healthcare costs, and the next two to three years of expected cash-flow needs.
The IRS notes that RMDs generally begin at age 73 for many retirement account owners, and that account owners are responsible for taking the correct amount on time. QCDs are generally available for IRA owners age 70½ or older when paid directly from the IRA to a qualified charity, and they can satisfy all or part of an IRA owner’s RMD.
The same market headline can mean different things for different clients. That is why personalized planning matters.
How SIG Is Using AI Responsibly
At SIG, we are using AI the way we believe a planning firm should use it: as a tool to improve preparation, organization, research, review, and service.
We are using and evaluating AI in areas such as research organization, Investment Committee preparation, weekly reporting support, market and economic data review, internal workflow efficiency, and client service.
AI can also assist with certain trading-related workflows, such as helping review tax-loss harvesting opportunities. But there is an important distinction.
AI is not creating client portfolio strategies.
AI is not creating financial planning strategies.
AI is not replacing fiduciary judgment.
AI is not replacing the planner-client relationship.
Every financial plan still needs to be personalized.
That matters because most good planning is not one strategy. It is the coordination of multiple strategies: investments, taxes, estate planning, insurance, income, liquidity, family goals, charitable intent, business ownership, and legacy.
A general answer can be helpful. A personalized answer is better.
AI can help us become faster, more organized, and better prepared. But it does not replace judgment, context, or the client relationship.
“The best use of AI is not to automate wisdom. The best use of AI is to help a good team spend more time on wisdom.”
What Clients Should Review Now
- Am I letting headlines drive my thinking?AI is important, but no single theme should replace the discipline of a financial plan.
- Is my portfolio still aligned with my goals?Markets move. Allocations drift. Concentration can build gradually. It is worth reviewing whether your portfolio still matches your time horizon, risk tolerance, income needs, liquidity needs, and tax picture.
- Are interest rates changing any decisions?Higher rates affect debt, cash, bonds, mortgages, business financing, real estate, and retirement income planning.
- Should year-end planning begin now?For Accumulation Phase clients, that may include tax-loss harvesting, gain planning, charitable giving, Roth conversion review, business-owner planning, or liquidity decisions. For Strategic Income Phase clients, that may include RMDs, QCDs, withdrawal planning, charitable giving, tax payments, and cash-flow needs.
- Am I using technology as a tool or a substitute?AI can help people learn and ask better questions. But decisions should still be made in the context of the full financial picture.
Planning Still Has to Lead
AI may change how companies operate.
It may change how markets price growth.
It may change how people learn, work, invest, and make decisions.
But it does not change the need for wisdom, context, and personalized planning.
At SIG, we want to use technology responsibly while keeping planning, purpose, and the client relationship at the center. We believe the goal is not to chase every headline. The goal is to understand what is changing, decide what actually matters, and help every dollar continue to serve its purpose.
If you are wondering how AI, interest rates, liquidity, tax planning, or current market conditions may affect your plan, bring that question to your SIG planner.
That is exactly the kind of conversation planning is designed to support.
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