The technology selloff highlights a key concern: strong AI demand does not automatically justify massive capital expenditure or elevated valuations. Investors increasingly want evidence of sustainable earnings, free cash flow and returns on invested capital.
However, I would hesitate to declare a permanent rotation away from technology. Defensive sectors and gold offer diversification, but carry their own risks. Political gridlock may reduce uncertainty without eliminating regulatory pressures.
My strategy remains disciplined ETF investing, with additional purchases during meaningful corrections.
What would change my view? Stronger AI investment returns, sustainable earnings growth and broader market participation. A lasting recovery needs improving fundamentals, not just temporary relief rallies.
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