Comment

Comment on Is there any way the average American can insulate themselves from the AI bubble bursting?

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.

source

Sort:hotnew top

Smoogs@lemmy.world ⁨1⁩ ⁨day⁩ ago
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.

source
- reptar@lemmy.world ⁨1⁩ ⁨day⁩ ago
  I guess up your international market fraction (?)
  
  source
  - Smoogs@lemmy.world ⁨18⁩ ⁨hours⁩ ago
    …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.
    
    source
    reptar@lemmy.world ⁨13⁩ ⁨hours⁩ ago
    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.
    
    source
blarghly@lemmy.world ⁨1⁩ ⁨day⁩ ago
Right.

I will say also that if you want to hedge against AI, then you could invest in non-US based index funds.

Another option is to invest in something like real estate. Do the math and find something you can profit off of even with a down economy and you’ll be able to get your investment to ride out the hard times and earn in the good times. But similar to index investing, these investments should be made with an eye on long-term gains (on the order of decades).

A final option - possibly the best - is to invest in yourself. Put the money into good health (physical and mental), skills that pay dividends (like being able to cook or do your own repairs, or building a community around yourself of hard working, optimistic, and sensible individuals. Skills education can be a great investment - either going to a university (careful here with costs, but college graduates still do tend to have better lifetime earnings than non-graduates), a technical school (AI probably won’t replace plumbers for quite a while), informal self-teaching (you can learn a lot of skills just making personal projects at home or in a makerspace). And for the more ambitious, you can start your own business, which could be as simple as buying a ladder to clean people’s gutters or a snow plow attachment and truck to plow driveways and parking lots.

Hard times are coming - they always are. The people who do well in hard times are the ones with a diverse set of useful skills, a resiliant set of assets, a positive mindset, and a supportive community around them.

source