The Long Term Investor

A couple of thoughts. We do see a lot of these headlines regarding "AI bubble." Some of it is probably not much different than any of the other stuff that is pushed out in the headlines. Everybody wants the title of "being right" at some point if it happens.

I know enough to know.... that I don't know enough about it. I think the expectations are sky high. In some ways, I do not disagree with the massive potential sure enough. On the other side of the coin, I do think any little stumble or negativity is amplified a bit. If there is some event or misguidance along the way and a down trend begins, I wonder what the panic level will be on some of these things. I suspect it will be like yelling "fire" at a theater.

I think it kind of goes hand in hand with the post above about investing psychology. Know your limits, whatever they may be for you. You can still participate without betting the farm.

 

Yeah, I held an "active" mutual fund for a long time. It wasn't a bad fund, but the expense ratio was eventually beat like a drum when the competitive expense ratio deal started to catch on. I dropped it for a passive index fund back then for almost nothing. Funny thing was the passive fund is still a mutual fund and not an ETF. It is in a tax deferred account, so no need for me to change now.

And yes, taxable accounts can be a bitty even holding one of those with capital gain distributions at the end of the year. It was an older "active" fund too, and the distributions really bothered me. I kicked it out long ago and went with a more tax efficient index fund.

A good point on fund placement and looking under the hood.