Investing Through the AI Boom: How to Brace for a Bubble

The Unhedged piece argues that the AI rally appears to be inflating a bubble, with lofty valuations and volatile pockets making it hard to time a top. For investors, the answer isn’t to sit entirely on the sidelines but to accept that some underperformance may be the cost of risk control. Hedge beyond traditional bonds with commodities and commodity exporters, consider non-tech core exposures (healthcare, Japan), and be mindful of leverage and a higher-inflation regime that can blunt bonds as hedges. In short, diversify, manage risk, and aim for “good-enough” returns rather than chasing peak performance as the bubble evolves.