If We're in an AI Bubble, History Says This Is the Best Way to Recession-Proof Your Portfolio
There might not be a safe place to hide in case of an AI bubble. But some ETFs could be less unsafe than others.
Overview
The stock market has had a pretty good year so far in 2026. The S&P 500 index (SNPINDEX: ^GSPC) recently reached all-time highs and is up about 12% year to date. But one cause for concern among investors is the question of whether or not we're in an artificial intelligence (AI) bubble. Investors have been enthusiastic about the potential of AI. But what if major tech companies have been overly optimistic and have spent too much on AI data centers? If the AI trade is overhyped, there could be a recession coming soon.
There's no 100% recession-proof strategy for investing. The stock market is unpredictable, and even if you know what is going to happen next with the economy (which no one does for sure), there's no way of knowing how the stock market will react.
Details
But if you're worried about a stock market sell-off from a possible future recession, one smart move is to just keep buying a well-diversified portfolio of stocks. Keep buying strong stocks with solid fundamentals, and your money is likely to keep growing in the long run, even in the case of a short-term bear market, recession, or bubble burst.
Source
Originally published at www.fool.com.