AI “play” - active or passive?

Alexland

For 7-10 years I'd still suggest looking at a global multi-asset fund or portfolio probably 60/40 given timescales but maybe 80/20 if feeling adventurous. At current S&P and Nasdaq valuations another lost decade of poor equity returns is a real possibility. The stock market tends to have decades where US outperforms and decades where it underperforms that tend to start when it's richly valued like now. A bad decade for US returns may have started last year.

thingswerentthisbadinmyday

https://forums.moneysavingexpert.com/discussion/comment/81883747#Comment_81883747

Thanks. I wouldn’t disagree with any of the above.

leosayer

I would be inclined to let them do their own research, particularly on buying a fund that could damage their wealth.

If it goes well, they will think how clever they are. If it goes wrong, guess who they will blame?

Bostonerimus1

So what do you mean by "play"? Investing money in a risky sector based on news reports and sky rocketing valuations? Given the capital concentration in tech companies your family member can buy into AI with a global or US equity index fund anyway. So my advice would be to ignore specific AI/tech funds.

thingswerentthisbadinmyday

https://forums.moneysavingexpert.com/discussion/comment/81886114#Comment_81886114

Thank you. I appreciate your comments.

Current thinking is to direct him towards a global Investment Trust (which will have a large US concentration anyway) or even something like an S+P 500 ETF.

MCMLXXVII

https://forums.moneysavingexpert.com/discussion/comment/81883480#Comment_81883480

I want to avoid giving specific investment recommendations, but chips (and specifically GPUs) are just one of the more obvious parts of the value chain.

But as I said, if you're not sure what you’re doing — don't. If you believe there may be a bubble and you want "things that won't be badly hit", avoid it altogether.

Then again, where this differs from any previous boom is that, if AI does become "everything", our entire economic model is up for debate.

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/81892481#Comment_81892481

You're a couple of years late if you're thinking about chips/GPUs now…

I'm interested why you think the entire economic model is up for debate - previous equally disruptive tech rev/evolutions haven't had such an effect.

masonic

https://forums.moneysavingexpert.com/discussion/comment/81892778#Comment_81892778

It depends what sort of "boom" it ends up being. If it is similar to the boom that resulted from Skynet's nuclear first strike, then we might have a problem. 😉

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/81892886#Comment_81892886

We certainly would, but I'm pretty sure the economic reaction would be entirely what was expected from the current model ;)