Using Decision Science in Investing: Masters in Business with Omar Aguilar

Aguilar says AI investment has expanded from hyperscalers into data centers and semiconductors, then into sectors such as healthcare, financials, and industrials; he also says AI emerged after his original forecast and helped extend the expansion. He expects profitability to be an important measure for investors next year.

Aguilar sees AI making advisors more efficient, freeing them to understand clients’ preferences and build personalized relationships rather than relying only on identifying investment needs. Schwab’s customized managed accounts, ETFs, and mutual funds reflect that approach, which he says helped the business reach $1.9 trillion in assets.

Aguilar considers tariffs inflationary, but says exemptions, negotiations, implementation difficulties, and uncertainty over possible Supreme Court action have limited their impact so far; strong corporate balance sheets have also let companies absorb some higher input costs. Separately, he says some goods costs are gradually rising even though the inflation rate seems stable.

Aguilar argues that retirement withdrawals should reflect needs, inflation, real growth, and interest rates rather than defaulting to a fixed 4%; he says that rate may not cover more than 25 years of retirement liabilities, especially with inflation. He also emphasizes early saving and employer matching, while noting that Schwab developed dividend strategies and liquidity-based money market funds with retiring baby boomers’ income needs in mind.

Aguilar says Schwab built core ETFs and beta and smart-beta exposures around transparency, liquidity, low cost, and accessibility, and that roughly 35% of the firm’s net new ETF assets come from outside Schwab. He points to the dividend ETF launched in 2011—which surpassed $100 billion and became the world’s largest dividend ETF—as an example of appeal based on 100 high-quality dividend payers and consistent results, rather than the lowest cost or highest yield.