The entire US economy is currently being propped up by growth in the AI/tech sector. And I am convinced that LLMs are fundamentally incapable of delivering on the promises being made by the AI CEOs. That means there is a massive bubble that will eventually burst, probably taking the whole US economy with it.
Let’s say, for sake of argument, that I am a typical American. I work a job for a wage, but I’m mostly living paycheck to paycheck. I have maybe a little savings, and a retirement account with a little bit in it, but certainly not enough that I can retire anytime in the near future.
To what extent is it possible for someone like me, who doesn’t buy into the AI hype, to insulate themselves from the negative impact of the eventual collapse?
Riding out economic ups and downs is really just about good personal finance. The good advice is the same in good times and bad, which is why it is good advice - in economics, you never really know when good or bad times are coming.
Your #3 is problematic.
The basis of the question is where to invest in order to avoid the coming AI crash. Your answer fails.
If you’re certain an “AI crash” is coming, then shorting AI companies is how you’d not only avoid the fallout but actually profit from it. That’s speculative investing though - basically gambling.
For everyone else without the ability to predict the future, the general advice stays the same: invest in low-cost, highly diversified index funds spread across sectors and regions. The markets are deeply interconnected, so it doesn’t really matter where you’re invested - when the market crashes, you’re getting hit. If you’re all in on tech, you’ll get hit hard; if you’re spread out, you’ll get hit less. But either way, you’ll feel it.
For someone in it for the long run, it doesn’t matter what the market’s doing. I just keep doing what I’ve always done - managing my finances carefully and investing my savings.
Shorting counts as income and you’ll be taxed on it as income. You also have a chance that no one will buy you out of the hole once it hits its mark.
Lots of risks in shorting.
While I agree with diversifying, the tariffs are fucking over the stock market hard in so many ways you cannot avoid it. Right now everyone sold their gold cuz they need money, And two days ago the tariff on China created a ripple on the precious metals. Tomorrow trump will fart some blithering assanine remark and suddenly for whatever reason lithium will take a dive for it.
Investing has become a stupid stress game.
I guess up your international market fraction (?)
…Tariffs affect other countries stock so you’ll get the same swing on the international. Im not sure you’re understanding how stocks work and maybe you’re just saying buzz words? Well… Either way, op is worried and they have a good reason to worry. They are educated enough about stocks to be worried. You…. You not so much.
Be nice!
US tariffs don’t exclusively hurt other countries stocks. You can compare an international domestic and emerging markets index fund to US domestic ones and see quite a divergence. The one I’m familiar with, ACWI, is up 21.8% YTD.
So getting to the point: I’m not sure of the point you’re making here as the reference you’re using is all domestic funded in the US. You didnt provide the comparison to the international. And the point of the post was that the going up is the bubble OP is worried about. You’ve done nothing more than establish what was already the fact OP was posting on. We are well past this.
If youre laying down information I’m checking it because there’s a lot of misguidance and misinformation online. If you think it’s not appropriate to call it out then you have a big problem here. I’m not going to apologize for being a critical thinker and you’re just going to have to figure out a way to live with that cuz compromising myself isnt going to come at the cost of approval from random strangers online.
As far as politeness: so far you’ve not posted in good faith. And so I owe you nothing. Now you may proceed to clutch your pearls.
If you’re certain there’s an AI crash coming then you could make a lot of money betting on it. Put your money where your mouth is and become one of the billionaires.
You could also just not invest money in AI companies.
where and how to invest, most people dont have that knowledge. also migrating to other countries isnt easy to.