If the AI Boom Slows Down, History Says This Is the Smartest Way to Protect Your Long-Term Portfolio
Yahoo Finance ·
The artificial intelligence ( AI ) market's breakneck expansion over the past few years sparked a buying frenzy in the sector's top chip and infrastructure stocks. Those soaring stocks -- including Nvidia , Broadcom , and Amazon -- propelled the S&P 500 ( ^GSPC +0.49% ) to record highs. According to Grand View Research, the global AI market could still expand at a 30.6% CAGR from 2026 to 2033. However, the S&P 500 also looks historically expensive at 29 times earnings, and a growing list of challenges -- including inflation, fears of rate hikes, and geopolitical conflicts -- could trigger a slowdown in AI spending and take down those top stocks. So if you're worried about an AI slowdown taking a big bite out of your portfolio, you should consider shifting some of your cash into the Schwab U.S. Dividend Equity ETF ( SCHD +0.79% ) , one of the market's most popular dividend-oriented ETFs. SCHD, which holds $112 billion in assets, passively tracks the Dow Jones U.S. Dividend 100 Index. To join that index, a stock must already be included in the Dow Jones U.S. Broad Market Index (excluding real estate investment trusts), have a market cap of at least $500 million, and have raised its dividend annually for at least ten consecutive years.
DYAX Investor Sentiment
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