Right. So, the AI thing. It’s been…a lot. Honestly, a bit exhausting. Everyone’s talking about it, piling in, and I’m just here, trying to remember if I actually understand what it does. The market’s been buoyant, of course – a lovely, terrifying balloon inflated by optimism. But balloons, as we all know, have a habit of…deflating. Deutsche Bank’s survey says 57% think tech valuations are looking a bit precarious. Which, translated from financial-speak, means ‘potentially overvalued’. I’ve been trying to be sensible, you see. A disciplined investor. It’s not going well.
The AI ETFs have been doing rather well, admittedly. The Global X Artificial Intelligence & Technology ETF (AIQ) has outperformed the S&P 500. But it had a wobble recently, didn’t it? A little shudder. Down 11% in a matter of days. It’s recovered a bit, but it’s enough to make one reach for the herbal tea and re-evaluate life choices. So, I’ve been thinking. What if the AI party does end? What if it’s not all self-driving cars and robot assistants, and more…a very expensive digital paperweight? I’ve been making lists, naturally. It’s what I do when I’m stressed.
Here are my attempts at damage limitation. Don’t judge. I’m winging it, really.
Value ETFs: The Sensible Shoes of Investing
The S&P 500 is looking a bit top-heavy with tech, isn’t it? All those shiny, exciting companies. But what happens when the shine wears off? I’ve been looking at value ETFs, which are basically companies that are…well, undervalued. The Vanguard Value ETF (VTV) seems a reasonable choice. 312 stocks, a wide range of sectors, and only 7.8% in tech. It’s like investing in…solid, reliable furniture. Not a bouncy castle.
The top holdings are reassuringly…boring. JPMorgan Chase, Berkshire Hathaway, ExxonMobil, Johnson & Johnson, Walmart. None of them are building sentient robots, as far as I know. And the expense ratio is ridiculously low – 0.04%. It’s almost…too good to be true. The earnings growth rate is 9.9%, and the P/E ratio is about 21. Less than the S&P 500 and that other one, the Invesco QQQ Trust. It’s not glamorous, but it feels…safe.
Small-Cap ETFs: A Little Bit of Hope
Okay, so maybe I need a bit of excitement in my life. Something a little less…establishment. Small-cap stocks. They’re not as exposed to the AI frenzy, and they’re often undervalued. It’s like rooting for the underdog. The iShares Russell 2000 Growth ETF (IWO) has 1,098 holdings. Healthcare, industrials, information technology…a decent spread.
I’ve been trying to convince myself that one of these small-cap companies could be the next Amazon. It’s probably wishful thinking. But it’s nice to dream. The expense ratio is 0.24%, and the P/E ratio is around 30. Cheaper than the S&P 500 and the Nasdaq-100. It feels…slightly less terrifying.
Bond ETFs: The Ultimate Comfort Blanket
Right. Deep breaths. Bonds. The Vanguard economic outlook is bullish on bonds. Apparently, high-quality US fixed income has the strongest risk-return profile. Which, translated, means it’s…less likely to cause a panic attack. The Vanguard Total Bond Market ETF (BND) lets you own a broad range of investment-grade US bonds. The expense ratio is a ridiculously low 0.03%. It’s like…financial chamomile tea.
Apparently, it’s mostly government and corporate bonds with high credit quality. 69.3% government bonds, 18.3% with an A rating or higher. It’s not going to make me rich, but it might just prevent me from losing everything.
Look, no one knows what’s going to happen. The stock market is a fickle beast. The bond market is…slightly less fickle, but still unpredictable. There’s no such thing as a risk-free investment. But if I don’t want to put all my eggs in the AI basket, these strategies might just help me diversify my portfolio and reduce my risk of a complete meltdown. Units of Cryptocurrency Lost: 12. Hours Spent Watching Charts: 9. Number of Panicked Texts to Friends: 24. And counting. I think I need a lie-down.
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2026-01-27 14:02