AI bubble
Technology moves fast, but real wealth is still built slowly.
In the financial world, “AI” has become a synonym for “volatility”. Fortunes are being made and lost on predictions about which chip maker or software company will rule the world.
It is easy to get caught up in the drama. Are we in a bubble that is about to burst, or a rocket ship just taking off?
My Personal Take (For What It’s Worth)
I believe we are living through a truly transformational moment. It is hard to predict what next week will look like, let alone the next five years. The only prediction I feel comfortable making is that the world will look drastically different, and thanks to AI, I believe it will be for the better. I see a future where our potential is unleashed in ways we can’t yet imagine.
Why My Opinion Doesn’t Matter
Knowing that something big is happening is very different from knowing how to profit from it. But here is the liberating truth: we don’t need to know. When it comes to my portfolio, my opinion about the future of AI is irrelevant. And yours should be, too.
If you are trying to pick the single company that will dominate this new era, you are playing a high-stakes game of roulette. Remember, in the early days of the internet, there were thousands of companies. Only a handful survived.
Here are some principles we can apply to this (or any) chaotic moment:
Avoid the “Winner” Trap: You do not need to find the needle in the haystack if you own the whole haystack. By owning stock market index funds, you automatically own the winners of the AI revolution. If a new company rises to the top, you will own it. If a giant falls, it will be replaced.
Think Long-Term: Technology moves fast, but wealth builds slowly. We are investing for decades, not for the next earnings cycle. This long view smooths out the inevitable volatility of a booming new sector.
Embrace the Ups and Downs: If this is a bubble, it might burst. If it is a boom, it might dip. A balanced portfolio allows you to ride through these waves without wiping out. We prepare for volatility so we aren’t forced to sell at the bottom.
Bet on Optimism: True optimism isn’t about blinding yourself to risks. It is betting that human ingenuity, powered by new tools like AI, will continue to solve problems and create value over time.
Focus on the Real Asset: The biggest beneficiary of AI might not be a stock in your portfolio, but you. If this technology makes us more productive and efficient, the real gains will come from how we use it in our careers and lives, not just from a ticker symbol.
The most important thing isn’t what you think about the AI bubble. It is what you do with your finances. Watch the AI revolution unfold with curiosity and optimism, but keep your money anchored in a strategy that has survived every bubble before this one.
Let’s Talk Money!
What is one way you can focus on your long-term goals instead of the short-term market noise this week?
In what ways do you think AI could improve your personal financial management in the future?