Comment by pc86
9 hours ago
If you truly believe this, slowly divest everything into cash, wait for the crash, then buy back in. Even buying in slowly over the course of a crash, on the way down, will save you a ton of money if you're out before it hits.
But you're more likely to just cash out early, lose a bunch of gains, then buy back in later at higher prices.
If you can time the crash you can make a shitload of money. But you can't, so you'll come out better if you just keep buying in every paycheck and ride it out just like you have been.
Yes to this. Take no alternative actions. Just keep investing and don't watch the market for a year or two.
There is the separate risk that Microsoft, Google, etc. will have a lower value in two years as governments get their migration off their platforms into full gear
Doing nothing different is the kind of plan I can easily execute !
It doesn't have to be 'ride it till it dies' or 'sell everything'. The AI bubble is almost exclusively contained to the US stock market and a few east Asian manufacturers.
You're right that selling everything and 'going to cash' would be a mistake, but diversifying away from US large cap growth absolutely wouldn't. I'm 60/40 stocks/bonds. My stocks and bonds are 50/50 us/intl. ~ 10% of my us portfolio is small cap value.
What's funny to me is that nobody learns from the past. This is far from the first tech bubble we've had even before the .com crash (canals, railroads, radio...). The answer, every time was diversification.
The east Asian semiconductor manufacturers are selling shovels in the gold rush and being very cautious about expansion given how capital-intensive the whole sector is. It's hard to come up with a scenario where they outright lose, even with the bubble popping.
I mean there's also a cost to not expanding too, in that you're leaving money on the table. I doubt they've really been able to resist the siren call of basically being able to print more money, but if the AI bubble collapses and they're left selling most of their production to consumers, they're gonna have a lot of stranded capital. Here's hoping they're smart enough to build a big war chest to weather the storm, but in my experience, companies rarely do.