Burton Malkiel

Is it possible that we are in the midst of an AI bubble?

Absolutely.

We have had bubbles in the stock market with every revolutionary event.

We had this with the internet revolution when the market then collapsed dramatically.

and went down 40% between the beginning of 2000 and the end of 2002.

But we don't know if we're in the top of the third inning of an AI bubble or the bottom of the ninth.

For those listeners who are worried.

The market is a lot lower in terms of its prices relative to earnings today than they were at the top of the Internet bubble.

When a lot of those Internet companies sold at 100 times earnings or more, the market's not cheap today.

but it is far more reasonably priced than it was then.

Yes, rebalance.

If your equities are too large now, definitely rebalance.

Do not, do not try to time the market.

You'll never get it right.

This was my thesis over 50 years ago when the book first came out.

It was not really accepted at that time.

A lot of professionals thought this was nonsense.

But the fact of the matter is that with over 50 years of experience,

We know that a simple so-called index fund, by which we mean a fund that buys all of the stocks in the stock market, does actually better than professional money managers.

It's not that it's always right.