Chart of the Week

Last week, we introduced the idea of the average investor having something for their appetite at the "ETF buffet".

We must remember that themes, fads, and sectors don't always stay in a favorable light.

Let's take a look at the table below showing annual returns by investment style dating back to 2014.

Some highlights illustrate the importance of diversification and the ebbs and flows of favorability across multiple market cycles.

Emerging Markets
2017: 37.8%
2018: -14.2%

Mid Growth
2021: 12.7%
2022: -26.7%

Small Blend
2015: -4.4%
2016: 21.3%

Now, let's keep that perspective with regard to artificial intelligence and the data center conversation that we're having now.

Thanks to Clearview, below is a summary of the current landscape of the datacenter buildout so far in the United States.

As you can see from the green dots, there are plenty of planned data centers that are pending approval for a variety of reasons.

Obviously these data centers cost a hefty dollar, which makes sense that, including SpaceX, capital expenditures are closing in on the $1.4 trillion estimates for next year.

Even debt issuance by data centers has nearly quadrupled than what it was 10 month ago.

Time will tell whether this theme or sector, even, becomes a bigger player in our overall economy, better or worse.

At the end of the day, smart diversification and sticking to your financial plan will keep you centered, help you weather storms, and ride the winners.

At SEM, we believe your time is best spent focused on what matters most to you, not on keeping up with the complexities, evolving regulations, and latest trends shaping the financial markets. With SEM as your trusted advisor, we take on that responsibility through a disciplined, research-driven investment process designed to identify opportunities, manage risks, and adapt to changing market conditions.

Thank you to all of the visitors who read last week's "Chart of the Week". I hope to continue sharing these talking points about markets, investing, etc., for you to share with family, friends, coworkers, or anyone along the way.

See you next time!

About the Blog

The purpose of SEM’s Traders Blog is to provide simple explanations about the current market environment. It is designed to give advisors talking points about the market and for individual investors to better understand what is happening.

Each week SEM posts a Chart of the Week to illustrate one aspect of the market in a different way than you might hear in the mainstream financial media. Throughout the week other posts will be made depending on the volatility, news events, or changes in SEM’s Scientifically Engineered Models