Today's Post - https://bahnsen.co/4w45BZc

David Bahnsen discusses why market drawdowns are normal and distinct from bubbles, using 2026 S&P 500 moves (down ~9% peak-to-trough, then a sharp rebound to up ~5% YTD) to argue markets are behaving typically despite war-driven narratives. He distinguishes frequent corrections from rarer bubble bursts and critiques the incoherent swing from “apocalypse” to “mania” framing. Bahnsen outlines three investor responses—market timing (impractical), buy-and-hold (endure), and embracing volatility through dividend growth and reinvestment—emphasizing asset allocation built for investor temperament and cash-flow needs. He applies historical bubble psychology (Kindleberger’s stages) to AI, predicting mixed outcomes: some hyperscalers and AI-related firms will disappoint or fail, while valuable companies may survive valuation resets. Key takeaways include inevitability of future corrections, prudence via diversification and limited AI exposure, and potential selective opportunities after any AI-driven downturn.

00:00 Welcome and Agenda

02:05 Year-to-Date Market Whiplash

04:45 Corrections Are Normal

08:11 Three Ways to Respond

12:20 Embrace Volatility With Dividends

14:10 Manias vs Bubbles

16:12 AI Bubble Risk and Diversification

23:27 Kindleberger Bubble Stages

26:42 Seven Investor Takeaways

29:05 Closing Philosophy and Farewell

Links mentioned in this episode:

TheBahnsenGroup.com