The Intelligent Investor's Almanac
Your Bi-Weekly Guide to Markets, Movements, & Money.
Presented By Ken Majmudar & Ridgewood Investments
Issue 4 • April 16 to April 30, 2025
Never miss another valuable edition of The Intelligent Investor's Almanac again.
Your TL;DR Institutional Intelligence
- Man vs Machine: Artificial Intelligence is reshaping productivity and boosting profits across industries.
- Strategic Opportunity: AI infrastructure companies and those implementing AI in their workforce are poised to be the biggest winners.
- Retirement Insight: Roth IRAs remain a powerful yet underutilized tool for building long-term tax-free wealth.
- Action Point: Consider incorporating AI exposure into your portfolio and tax-efficient strategies like Roth conversions into your retirement planning.
From the Desk of Ken Majmudar, CFA
Founder, Ridgewood Investments
We’re on the cusp of an economic transformation akin to the steam engine, electricity and the internet. Artificial intelligence is a powerful and general-purpose technology that is now diffusing into the mainstream economy. While headlines spotlight futuristic use cases like humanoid robots or sentient chatbots, the real story is the quiet but profound boost to productivity across legacy industries.
Across the U.S. economy, companies report spending less time on routine tasks, lower service delivery costs, and higher-quality outputs.
Here are some examples of how AI is helping to grow different sectors of the economy:
Industries Seeing Growth from AI:
Healthcare: From diagnostics to documentation, AI is already reshaping care delivery. According to a National Bureau of Economic Research paper, AI could reduce U.S. healthcare spending by 5%-10% annually. That translates to over $300 billion, largely through improved claims automation, fraud detection, and virtual assistants for clinicians.
Health insurers like UnitedHealth and Cigna use AI for real-time risk prediction and faster approvals, saving money and improving customer satisfaction.
Manufacturing: According to BCG and the World Economic Forum, AI-driven predictive maintenance, quality control, and supply chain optimization have allowed industrial firms to reduce downtime by 30–50% and cut inspection times by up to 90%. Firms like General Motors and Siemens now embed machine learning into factory workflows, making every machine smarter and more efficient.
Finance: Wall Street has long embraced automation, but generative AI is rewriting workflows from wealth advisory to fraud detection. McKinsey estimates that U.S. banks alone could unlock $200 billion in annual value from AI applications that streamline customer service, underwriting, and regulatory compliance.
Logistics and Supply Chain: In logistics, FedEx uses AI to dynamically route packages based on real-time weather and traffic data, cutting delivery times and fuel usage. A study from Georgetown’s Journal of International Affairs found that early AI adopters in supply chains reduced logistics costs by 15% and improved inventory accuracy by 35%.
Professional Services: Even knowledge-intensive sectors like law, marketing, and consulting are undergoing transformation. AI tools enable professionals to draft documents, analyze data, and synthesize insights much faster. A Science Magazine study showed that consultants using AI completed writing tasks 40% faster with 18% better results.
How AI is Transforming Core Business Functions Across Sectors
How to Invest in the AI Supercycle
AI is democratizing access to intelligence at relatively low costs and becoming the “digital electricity” of our time. Like the internet boom, it will not just be about the tech giants. It will trickle down towards enablers, adopters, and infrastructure builders.
At Ridgewood, we focus on value creation and investment compounding through durable trends. As AI boosts the bottom line of firms across industries, disciplined and hedged exposure can enhance your portfolio’s growth.
As investors, we can participate in AI’s long-term growth by focusing on the underlying ecosystem that powers it, such as the hardware, cloud infrastructure, and software tools enabling AI capabilities. Exposure can also come through specific stocks and diversified ETFs across the broader AI value chain.
Roth IRAs: The Secret Weapon in Your Retirement
When we speak to our clients to help them plan their retirements, we also make sure to speak about Roth IRAs, a tool becoming the centerpiece of dynastic wealth planning across America.
Innovative pathways like in-plan 401(k) conversions, solo 401(k) Roth maximization, and the new 529 rollover rule are expanding access. With Gen Z and millennials now contributing more to Roths than any previous generation, the focus is on avoiding tax rather than saving money.
A Roth IRA is a retirement account that offers one of the rarest gifts in investing – tax-free growth and tax-free withdrawals. Here are some of the biggest benefits of using a Roth IRA:
- Tax-Free Compounding: All dividends, interest, and capital gains grow without being taxed.
- Tax-Free Withdrawals in Retirement: Once you’re over 59½ and the account is five years old, every dollar you take out is yours to keep.
- No Required Minimum Distributions (RMDs): Unlike traditional IRAs or 401(k)s, Roth IRAs don’t force you to withdraw funds at a certain age, allowing more control and potentially better inheritance planning.
- Favorable Legacy Treatment: Your heirs inherit Roth IRAs tax-free (though they must withdraw within 10 years), making it a powerful estate planning tool.
- High-Income Workarounds: Backdoor and mega-backdoor Roth strategies allow high earners to contribute beyond income limits.
This blend of control, flexibility, and tax advantages make Roth IRAs uniquely positioned for modern retirement planning – especially in uncertain fiscal environments.
Traditional vs. Roth IRAs
Smart Roth Strategies
Here are some suggestions we often give our clients to help them maximize the benefits of a Roth IRA account:
- Start Early: The earlier you begin, the more you benefit from compounding and tax-free growth. Even modest annual contributions can grow significantly over decades.
- Use Roth Conversions Strategically: If you’re in a lower income year or have large deductions, converting some of your traditional IRA to Roth can “lock in” taxes at a lower rate now for future tax-free withdrawals.
- Tax Diversification: Blend Roth, traditional, and taxable accounts to create flexibility in retirement income planning. Having options helps you manage taxes in retirement more effectively.
Think of Roth IRAs as insurance against future tax uncertainty. Financial strategies must be forward-thinking in an era of innovation, disruption, and fiscal volatility. The Roth IRA delivers that by ensuring your future income isn’t at the mercy of future tax rates.
Here’s to building lasting wealth,
Ken Majmudar, CFA
Founder & Chief Investment Officer Ridgewood Investments
P.S. If you’re ready to explore how our institutional-grade investment approach can work for your portfolio, let’s schedule a time to talk below.
Gain Industry – Level Intelligence For Your Investment Strategy
Transform your approach to wealth building with institutional-grade insights. Schedule a private discovery call with Ken and the Ridgewood team to:
- Analyze your current portfolio positioning
- Explore sophisticated investment opportunities
- Design your personalized wealth architecture
Building generational wealth requires institutional-grade thinking. Let’s discuss how our sophisticated approach can work for your family’s future.
Important Disclosure: Ridgewood Investments is a registered investment adviser. This newsletter is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results.
