Is today’s AI boom starting to feel like the dot-com era? In this episode, Jerry Davidse compares two “world-changing” moments: the launch of the modern internet (Netscape, December 1994) and the current AI surge that accelerated with ChatGPT in late 2022.

Back then, markets delivered incredible gains… yet the path wasn’t smooth. Excitement turned into overconfidence, valuations stretched, and investors learned a painful lesson: great technology doesn’t guarantee great investment results at any price. Jerry uses Cisco’s sky-high valuation near the 2000 peak as a reminder of what can happen when expectations outrun fundamentals.

Fast-forward to today: AI is transforming productivity and reshaping industries, but market leadership is concentrated and emotions are running high. History doesn’t say innovation is “bad”, it suggests volatility and rotation often come with it.

Key Takeaways:

• Two major tech shocks: Netscape (1994) and ChatGPT (2022) changed expectations overnight

• Big returns can still be bumpy: Strong markets often include volatility

• Valuations matter: Great companies can be poor investments at the wrong price

• Concentration risk is real: When a few names drive returns, portfolios can get unbalanced

• Innovation often brings rotation: Market leadership can shift quickly

• A smarter approach: Diversify, stay disciplined, and rebalance when emotions run high

The takeaway? Don’t ignore AI—but don’t go all-in either. A disciplined, diversified approach can help investors participate in innovation without becoming dependent on a single theme.

Want help building a goals-based plan designed for a range of market outcomes? Connect with the team at Presilium.

#Investing #AI #StockMarket #Diversification #MarketVolatility

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Connect With Jerry:

Jerry Davidse, CFP®

CEO, Presilium Private Wealth

Email: [email protected]

LinkedIn: https://www.linkedin.com/in/jerrydavidse/

Meet Jerry: https://www.presiliumpw.com/team_member/jerry-davidse-cfp/#bio

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