An S&P 500 without the AI stocks is keeping pace with the real one this year. Let that sink in. Millions of people spent two years learning what a GPU is, and a boring index with the exciting parts removed did just as well.
The tech trade is fraying. Fraying is what a sweater does. It's also what your net worth does when you buy Nvidia on a podcast recommendation.
The advice for what comes next is predictable. Buy utilities. Buy health care. Buy consumer staples. Buy the companies that make toothpaste, pills, and electricity. Products that have never once been described as transformative.
Picture the retail trader reading this. He sold his emergency fund for a chatbot company with no profits and a logo that looks like a tidy sphincter. Now he's told to buy a regional water utility. He'll do it. Then he'll check the price every four minutes, because a utility yielding three percent apparently needs supervision.
The AI believers have a fallback. It's a pause, they say. A digestion period. Markets digest the way my uncle digests a Thanksgiving dinner, loudly and with a lot of lying on the couch.
Here's the technical read. A chart is a record of people's feelings about a number. The feeling was greed, and now it's a mild stomachache. I draw lines on it. The lines don't care about your data centers.
Diversification is back. It's the thing your parents did, quietly, while you were learning to say "inference." They own a lot of boring things. They are fine.
You bet your retirement on a technology designed to replace you. The least it could have done was replace you before the drawdown.
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