I can see your halo, halo, halo.

Beyonce fan or not, a new trend may be taking over Wall Street with an investing approach that favors stocks with significant real-world assets and low chances of becoming obsolete. The Heavy Asset, Low Obsolescence strategy played out in the markets in recent weeks as investors piled into companies with hard assets, like refineries, airliners or data-centers, and ones that are much less likely to be displaced by large language models. Look no further than the prices of Charles Schwab, LPL, Raymond James and other brokerages that tanked earlier this week after news of a new AI tax tool shook investor confidence. That same anxiety is pushing money out of enterprise software companies and into businesses viewed as harder to disrupt, and it could become a dominant investment theme this year.

“This is the simplest idea in the world,” said Ritholtz Wealth CEO Josh Brown, who coined the term in a blog post over the weekend. “[Allocators] don’t want to go to sleep at night, wondering if they’re going to wake up the next day and Perplexity just took the f****** business.”

Getting Heavy

For investors, 2026 may be the year that AI disruption really shakes up the markets. Unfortunately, these new HALO stocks are sometimes hard to pin down (but not quite as hard as obsolescence is to pronounce). Not only do they span sectors, but there’s not a traditional framework to classify them. Examples include energy giants like Exxon, retailers like Walmart, fast-food chains such as McDonald’s and Starbucks, industrial and materials companies like Caterpillar, and consumer staples like Hershey. What unites them is dependence on physical goods, infrastructure or services.

“No matter what Anthropic disrupts next, it can’t make a can of soda,” Brown told Advisor Upside. “It can’t build a crane. It can’t build natural gas lines that took 50 years to build and [faced] licensing and regulatory hurdles.” There are some interesting ETFs tracking broad market segments that are illustrating the trend:

• The most popular energy fund, XLE, is up 23% year to date. There are other funds from State Street Investment Management that track materials and consumer staples, namely XLB and XLP, that are up 18% and 14%, respectively.
• Compare that with iShare’s Expanded Tech-Software Sector (IGV) that has shed 22% of its value this year as of Wednesday.

Rob Thummel, a senior portfolio manager at Tortoise Capital, said he wasn’t familiar with the HALO acronym but the US runs the largest energy pipeline network in the world, and almost all the operators are publicly traded with high free cash flows, high dividend yields, and solid balance sheets. “Said in a different way, there is no economy without energy. We study all new, emerging energy technologies and we don’t see anything on the horizon that will materially alter the US energy supply,” he said.

Coin It. The market is already re-weighting multiples as investments have been pouring out of enterprise software companies, Brown said. “We might have called these old-economy stocks, but I think the correct terminology is investors now want to own companies that have heavy assets and low obsolescence risk,” he said. “That’s HALO.”

Time to go beast mode.

Internet personality Jimmy “MrBeast” Donaldson and Beast Industries announced this week their acquisition of Step, a banking and investing fintech platform designed for teens and young adults. The deal highlights how today’s young people are saving and investing earlier than previous generations, but significant financial literacy gaps remain. Many don’t know where to start, and that’s creating an opportunity for financial advisors to extend their value toward the next generation.

“We have one kid, whose great-grandfather was a client of mine,” said Clark Randall, a CFP with Creekmur Wealth Advisors. “He’s got a small, $4,000 Roth IRA, and he’s treated just like his mother, who has hundreds of thousands in assets, or his grandmother, who has millions.” His firm has always viewed the entire family as the client. “You’re developing the next generation that will eventually inherit the money,” he said. “It makes good business sense.”

‘Appily Ever After

Apps are one of the primary ways teens and young adults engage with financial information, and fintech firms have rushed to meet them where they are:

• Many platforms are built around prepaid debit cards that parents monitor, with added features like budgeting tools, educational content, chore tracking and limited investing options.
• Platforms such as Greenlight and GoHenry, the latter of which was acquired by Acorns in 2023, now serve millions of parents and children.

But the specific app matters less than the habits being formed, said Michael Lofley, a CFP with HBKS Wealth Advisors. He tells clients to focus on instilling work ethic and disciplined saving in their kids rather than obsessing over early investment performance. “Choose something simple and diversified,” he told Advisor Upside. “Over the long run, improving your career potential and maintaining disciplined savings habits will go much further than finding the perfect app or investment vehicle.”

Let’s Rap. Even when advisors aren’t ready to formally onboard a client’s child, some offer basic financial planning sessions on an hourly basis. Lawrence Pon, founder of Pon & Associates, said he avoids discussing specific products and instead centers conversations around goals and behaviors.

“Unfortunately, many of these children pick up bad habits from their parents,” he told Advisor Upside. “I’ve seen kids with constant tax trouble or overextended debt, mirroring what they grew up with.” He often recommends these sessions as pre-wedding gifts, noting they can even prevent future marital conflict caused by financial incompatibility.

Want to scare the big brokerages next Halloween? Dress up as AI.

On Tuesday, the digital-first custodian Altruist launched a new artificial intelligence-powered tool on its Hazel platform designed to create tax strategies for clients based entirely on their documents. The launch caused the stock prices of several major wealth management firms to take a tumble, including LPL Financial, Raymond James and Charles Schwab. Experts said the selloff appeared to be an overreaction, but that whether any AI tool becomes a real threat to bottom lines depends on adoption.

“Hazel is significant, but not by itself,” said Bill Harris, CEO of Evergreen Wealth. “It’s part of a wave of AI tools for advisors.” He added that there is a large menu of wealth management tools — notetaking, marketing, report generating — that will “definitely change the way that advisors work.”

IRS Meets AI

Tax planning tools have been around for years, but until now they’ve been more manual, requiring users to enter information by hand. The Hazel upgrade, on the other hand, purports to generate tailored tax plans for clients based on the data in their 1040s, account statements, pay stubs and more. Harris said certain wealth management firms will go the way of mutual funds in the era of the ETF — just a lot quicker. “Mutual funds have not disappeared, but the growth is gone,” he said.

However, other advisors said the tool is not as big a threat as recent stock market shifts have indicated. “[Advisors] are here for interpretation more often than information, and the human layer is often what becomes the differentiator,” said Kyle Mostransky, CEO of Mostransky & Associates. “Most financial decisions are driven by fear, regret, greed, pressure, goals. AI can optimize the math, but not the meaning of those decisions.”

That didn’t stop many firms’ stocks from taking a hit, and some dropped further Wednesday:

• LPL Financial’s stock was down 5.7%, and Charles Schwab’s was down 4%.
• Stifel Financial and Piper Sandler Companies were down 1.5% and 4.5%, respectively.

Under My (Price) Umbrella. The real impact of AI tools may be on fees as they continue to push down the price of human advice, Harris said. “Right now, a wealth management firm offering a human financial advisor, as opposed to a robo advisor, is typically [charging] 1% per year of the assets or more,” he said. “That will erode.”