| WEEKLY ROUNDUP How to Create a “Golden Portfolio” in an Overcrowded Tech Market VIEW IN BROWSER Hello, Reader. In September 1977, NASA launched Voyager 1 into the outer solar system. This spacecraft, which is still active today, carried unique and precious cargo… A collection of music on a Golden Record. The 90-minute compilation was designed to convey the diverse richness of Earth's cultures. It was, essentially, humanity’s “message in a bottle” to the universe – and any other beings that might be out there. It featured classical music, from Bach, Beethoven, and Mozart; popular songs, like Chuck Berry's "Johnny B. Goode"; and traditional music from around the world, including a Navajo chant, Azerbaijani bagpipes, and a Peruvian wedding song. The image below shows the Golden Record, including etched instructions to any extraterrestrials out there. 
I share this story not to focus on the feats of space travel, but to impart a key lesson about the importance of diversification. Like the Golden Record, your portfolio should feature a diverse set of companies. Consider this: Several of the Magnificent Seven companies are set to report their quarterly earnings this week. Although these companies remain immensely profitable, the cost of creating competitive AI infrastructure is massive and rising, while the ultimate payoff is becoming less certain and immediate. Much of Big Tech is priced for perfection. And when expectations are that high, there is little room for error, and even less room to grow. So, it is time to adjust to a world where the Mag 7 stocks do not produce robust cash flow and fat profit margins as reliably as they did in the past. Now is the time to diversify away from richly valued tech and toward resilient, real-world value. To be sure, many of the stock market winners of the next decade will emerge from technology breeding grounds like Silicon Valley. But many winners will also spring from non-tech locales – either because they are enabling AI, applying AI, or possess a durable immunity to it. A balanced portfolio, therefore, should feature companies that are successfully riding the AI wave, as well as companies that the wave cannot ever wash away. These are the “AI Survivors.” They are enterprises that produce physical products or services that AI cannot replace. Take agriculture companies, for example. No matter how sophisticated AI becomes, humans will want to eat avocados and bananas – and AI can’t grow or pick them. Now, AI Survivors are easy to overlook. That is why I detail several of them in my free AI Survivors broadcast. I strongly suggest diversifying your portfolio by putting your money to work outside of traditional AI stocks. You can think of it as creating your own “Golden Portfolio”… without having to launch anything into space. And this past week here at Smart Money, we talked about several other ways you can diversify your portfolio, including investing in foreign stocks and commodities like copper. Take a look below, and then I’ll share an upcoming opportunity in AI, national security, and U.S. industry. | 
No comments:
Post a Comment