The AI ‘Bubble’ - What They ARE NOT Telling You!

What's up you guys, it's Graham here, and this is getting out of control. Overall, it seems like more and more people are worried about investing into an AI bubble. Job losses are accelerating at the fastest pace since 2003, and the situation has gotten so bad that even Michael Burry has just quit the market. Meanwhile, the top 10 companies now make up a record 42% of the entire S&P 500. The bottom 50% are completely negative for the year, and the best stock trader in the That's why we gotta talk about what's actually going on, how some investors are about to make a ton of money, and how 2026 could be one of the biggest opportunities we have ever seen. Because believe it or not, there are proven strategies to be able to make money in any market that most investors are completely unaware of. And this is so important that these next 10 minutes could be the complete difference between missing out and getting rich. Although before we start, if you find these videos helpful, please hit the like button and subscribe if you haven't done that already. I hate asking for it, but my analytics show that just mentioning it makes a huge difference for the entire channel, and as a thank you for doing that, here's a picture of a baby goldfish. So thanks so much, and also a big thank you to MooMoo for sponsoring this video, but more on that later. Alright, so to start, when it comes to investing, even though you might see screenshots on Twitter where people have magically turned $10,000 into $10 million dollars, I hate to say it, but it's probably a good idea to realize early on that you're most likely not going to be the next Warren Buffett who will see these crazy returns indefinitely. I mean, sure, I know it sounds easy to sell when Trump talks about tariffs and buy back in when he announces a resolution, but when it really comes down to it, your odds of getting any higher than the market average is so small that 90% of actively managed funds fail to outperform the S&P 500 over a 15 year period. Now sure, in the short term, you will naturally see outliers, some of which are either incredibly talented at the right place at the right time, or uh, Nancy Pelosi, but what I found most surprising is that even the funds that do beat the market still have investors that wind up losing money, and a perfect example of this is what's called the Magellan Fund. This was the world's best known mutual fund which had record setting growth under the management of Peter Lynch from 1977 to 1990, but despite their incredible success, having outperformed the market by a long shot for more than 15 years, it was reported that the average investor lost money during a time when the fund returned around 29% annually. How? Well, during those years, there were both good times and bad times, and unfortunately, instead of holding through it, the average investor would buy in at the peak after it's already gone up in price, and then sell as soon as it fell, thereby locking in their losses and missing out on all the subsequent growth. Now even though this sounds like a perfect case of don't time the market, it's a good reminder that you shouldn't be buying stocks because you're chasing returns and expecting higher than the market average. I mean, this is exactly what's happened throughout most of Cathie Wood's funds once she outperformed Warren Buffett, but that didn't last, and long term Warren Buffett once again came out the clear winner. The same applies to Michael Burry, who recently shorted the market and then subsequently shut down his entire fund, allegedly saying, my estimation of value in securities is not now and has not been for some time in sync with the markets. Although speaking of market returns, there is another problem I would like to discuss, and that has to do with stock prices. Look, every time you calculate market returns, it's really important to understand that even though the market goes up an average of 10% a year, actually earning 10% in a year as it turns out is incredibly rare. Like as the Wealth of Common Sense blog points out, who I'll link down below in the description, the market has only gone up 8-12% in a year, 5 times since 1926. That's it. Or basically, going up 8-12% in a year is just as likely to happen statistically as the market going up 40% in a year. Not to mention, even more absurd is that only 18% of returns have been between 5-15% in any given year, and it's more common to see double digit gains or losses in a single year than it is to get the average. That's why it's really important that if you're investing, you need to have an outlook of decades, not just weeks, months, or years. And when you look at a rolling 30 year period of the S&P 500, since 1926, the best return was an average of 13.6%, while the worst was an 8% return from 1929 to 1958. Of course, there is no guarantee we'll continue to see these types of returns in the future, and there's always a chance we could have another great melt up because the United States is printing so much money that this time is different, but that's why there's another solution for anyone who's worried about another crash, or an AI bubble, or just the market continuing to go higher, and this is what's called the all-weather portfolio. The reason I bring this up is because during a time when investors are worried about a market bubble, or an impending crash, or rising prices, or insiders selling off their stock in record numbers, it's important that you pick a strategy that's best suited for what you're able to handle, and this one's quite interesting. This was created by the billionaire changing world order predictor Ray Dalio, who on the surface has seemingly become very correct in his assessment that the US dollar might be headed towards an inevitable downfall, so he created a portfolio that was able to withstand whatever you throw its way, while still being profitable. See his theory is that we have four major cycles throughout our economy. We have rising prices with inflation, falling prices with deflation, rising growth with the bear market, and in each of these four quadrants, there's a best performing asset that's going to go up while everything else is going down. Like in this case, we have a mixture of stocks, equities, bonds, and commodities. Stocks perform the best when the market's rising, commodities do well when inflation goes higher, and bonds are supposed to take care of the rest when everything else falls. Since high growth is usually a lot more common throughout history than high inflation, this is weighted in such a way that you could take advantage of what's most likely going to happen in the near future, which is that stocks just keep going higher. So if you're curious how something like this is performed and how much money you could potentially make by investing in it, here's where things get really interesting. But before we go into that, as most of you know, I do a lot of research to put these videos together. Lately, quite a few of you have asked about which resources I like to use the most often, and one of them that I've been relying on quite a bit just so happens to be the sponsor of today's video, and that would be Moomoo. 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Alright, so now, let's talk about how much money you could make with Ray Dalio's all-weather portfolio. Believe it or not, over the last few years, this was found to have outperformed the S&P 500 by 25%, and from 2006 to 2018, it also delivered above average returns while at the same time protecting your downside. How is this possible? Well, because it was meant to last through all-weather and ongoing government shutdowns, volatility was pretty much non-existent, or in other words, instead of seeing huge price increases and decreases, it just cruised along every single year as normal. For example, in 2009, when the S&P 500 fell 50%, the all-weather portfolio only fell 17%. So if it's performed so well and there's almost no volatility whatsoever, why isn't it more popular? And, uh, what's the catch? Well, here's the reality. With any fund out there, it's very easy to selectively pick dates that work with whatever narrative you're trying to get across, like conveniently starting this right before the 2006 stock market crash. But if you go back to the mid-1990s, you could see that Ray Dalio's portfolio earned a total of 758% during a time when the S&P 500 increased a whopping 970%. And even more recently, in 2024, this portfolio went up 11.4% against the S&P 500 at 23.3%. Or basically, even though you limit your downside and in long stretches of volatility, this portfolio does incredibly well. When the market is rising, your upside is also capped just as much, and therefore you end up making a little less money. But then again, let's be real. This portfolio did do incredibly well from 2005 to 2020, and it made some people a lot of money. So what happened? And is it still good to follow this in 2026? Well, here's the truth. First, for the last 40 years, and especially for the last 5 years, bond yields have done nothing but go down. And that makes up a significant part of this portfolio. Like, for those unaware, a bond is really no different than giving an IOU, where you lend a city, a state, a government your money, and they promise to pay you back with interest. However, with interest rates consistently decreasing back down to nothing, bond yields have declined to record lows, meaning you as an investor are now getting paid back a lot less money, and that means a significant part of your portfolio is not keeping pace with inflation, or even going down in value. Second, also for the last 30 years, I know this is not popular to say, but gold has really not kept up with what the S&P 500 and stock market has been doing. I mean, sure, this last year has been exceptional for gold, and it really proves that there's an argument for holding a decent chunk in your portfolio. But over the long run, the S&P 500 still tends to come out ahead. However, there is one exception to this, and that would be the all-weather portfolio with Bitcoin. Now, even though we don't have multiple decades worth of data compared to something like gold, it was found that just a 2% allocation to Bitcoin has been shown to have increased your overall returns to 16.86%. And even though, yes, starting in 2011 was a bit unfair of an advantage because very few people were buying it back then, it was still found that buying any Bitcoin yielded, so far, pretty positive returns. For example, Bitwise found that a holding period of more than 2 years has had a positive return on overall performance, and just a 2.5% allocation would have boosted your return by nearly 150% over the last 10 years without adding much risk. Fidelity also came to the same conclusion in that a small allocation to Bitcoin ended up boosting performance by a lot without really increasing volatility. Of course, a lot of these have only been back-tested for the last 10 years, and it's heavily skewed towards Bitcoin's early days seeing triple-digit growth. But even more recently, a dollar-cost average approach would have yielded some pretty significant profits. So in terms of my own thoughts, what you could do with this information, and how to hopefully have a very profitable 2026, here's what I think. First, you probably shouldn't be investing with a short-term outlook. Even if we are in a massive AI bubble, all the research has shown that stock market returns are never average until you look at it from a multi-decade perspective. Because of that, short-term movements are completely unpredictable and completely outside of your control, and it's more important to instead just stick with the plan, keep buying long-term, and carry on as usual. Second, you shouldn't invest too much without diversifying. Of course I understand, it's easy to want to YOLO everything you have into Bitcoin and Tesla with the expectations of making a few thousand percent return, but you have to understand that the more likely you are to make money, the more likely you are to also lose it. Plus, as I mentioned earlier, individual stock picking is almost impossible over a period of 15 years, so it's probably better instead to take a more balanced approach. Third, do not blindly follow others. I know this seems common sense, but it's not. Anytime you see people driving into one stock, asset class, or company, you have to take a step back and do the research yourself to make sure you're not getting caught up in the hype. From my experience, really the best investments out there tend to also be the safest and the most boring, and a lot of people overlook them because they want the fast money now. But instead, the safe and boring investments long-term end up usually making you the most money. Fourth, along that same train of thought, for the millionth time I've said it, you shouldn't time the market. The reality is, statistically, you are 66% more likely to make more money investing your money right now, today, than you are waiting. And all the studies show that long-term, the safest, best approach is simply to keep buying in on a regular basis throughout a diversified group of funds, and that's it. Not to mention, anytime you time the market, you have to be right twice, once when you sell, and then again when you buy back in, and the chance of getting those both correctly is pretty much non-existent. And finally, fifth, you probably shouldn't be investing if you can't handle your emotions. Personally, the only way to remain completely neutral is to have full faith in your investments and that if they drop, you're not going to be affected by it and it doesn't really matter because you're not planning to use the money or sell it anyway. From my experience, after speaking with hundreds of people at this point, if you're losing sleep, if you can't concentrate, and you're worried about a 20% drop, chances are you're investing too much, you're making too risky investments, and you should take a step back so that you can make objective, neutral decisions. This way, hopefully you can hold through long-term until there's a recovery, or the market just keeps going up higher because they just keep printing more money. That's why, in terms of what I think, 2026 is not about avoiding the stock market entirely, but it's about recognizing the environment that we're in and planning accordingly. We could very well see these valuations continue to decline as investors sell off and take risk off the table, or we could see the market surge in growth as the Fed continues to lower interest rates and print a lot more money, especially with trillions worth of cash sitting on the sidelines. Really, either scenario could wind up taking place, which is why it's more effective to diversify into different investments like stocks, crypto, gold, treasuries, and so on, than try to predict what's going to happen next. The way I see it, the people who really come out ahead in 2026 profitable are not the ones who are chasing the latest headline, but instead, the people who just keep buying are properly diversified and really just look at the math instead of having their emotions take over. So whether we get a correction, a crash, or another year of unprecedented growth, the smartest move is to stay consistent, stay diversified, and prepare for every what-if, because in the markets, the only real mistake is assuming you know what's going to happen next. Like me asking you to hit the like button and subscribe if you haven't done that already. So with that said, thank you so much again for watching, feel free to check out Moomoo down below in the description and make sure to claim that bonus, really means a lot, and until next time.