Investment Strategies with Aileron


Q: How should I invest to take advantage of the rapid increase of robotics in our economy?

A: Considering the stock of companies in industries that are most likely to benefit from using fewer rather than more employees, as well as industries that require high precision labor. These companies are candidates for increased use of robotics. However, there are multiple considerations whenever investing in a stock, the use of new technology can certainly be one of them.

For example, last year when visiting Germany, I tried to eat lunch at McDonalds in the Frankfurt airport. It was closed and remained so for several months. Recently I was again at the Frankfurt airport and McDonalds had reopened for business. However, much had changed. I ordered my meal on a robotic menu – not from a person. When I went to pick up my meal at the counter I noticed that instead of a dozen or so workers scurrying behind the counter, there were now only a handful who were aided by new technology.

Americans buy many different Chinese products, but not automobiles. Why? Because they are an inferior product. Why? Because currently China uses very few robots in its auto industry which requires a very high degree of precision workmanship. Japan, Germany and the U.S. have a high percentage of robots doing the most difficult and precise functions and thus have higher quality automobiles. However, China is rapidly converting to robotic assembly lines and the international competition dynamics could change quickly. This may provide an investment opportunity.

You might also consider firms that make the robots. Most robots are produced by companies in five countries: China, South Korea, Japan, Germany and the U.S. If more robots are part of the future, some of these firms could benefit and may provide additional investment opportunities.

Before investing you should have circumspect conversation with your trusted advisor about the potential risks and possible rewards. For many investors, the social implications are also an important part of the discussion.

This is for education only. Before using this information in any way discuss it with a financial professional. There are many risks associated with stock trading. You may lose some or all of your financial investment. Securities offered through Dempsey Lord Smith, LLC Member FINRA/SIPC. Securities offered through Integrated Financial Planning Member FINRA/SIPC. Advisory services offered through Dempsey Lord Smith, LLC.

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