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?
Follow the classic financial advice of setting aside enough emergency savings for a period of unemployment and diversifying the asset classes in your investment accounts (eg, retirement, health, education savings) to align with your risk tolerance & goals.
I keep 6 months of emergency savings in a high-yield savings account & let a robo-adviser passively invest my other savings on autopilot. While that means losses with market downturns, all the advice I’ve read & studies they refer to that run simulations over historic data (including shocks, downturns, bubbles) say that impassively holding that strategy has historically come out gaining & beating inflation.