Headlines say it is 100% overvalued. People are looking at the markets and saying how crazy the returns have been.
If you look at the stock market, it made money because of seven leading stocks, mainly tech stocks like Nvidia, Meta, Microsoft, and Alphabet, that can gain from the AI boom. Those seven stocks can account for up to 95% of the gain in the stock market. It leaves us to question if they are overvalued. It depends on what you think of AI.
Secondly, are interest rates going to come down? The market is saying yes, which is why the valuations are where they are.
Are there going to be problems next year, like political issues? There will be 43 elections worldwide next year, which could cause disruption and affect the markets.
This brings us back to the beginning again and AI. If Artificial intelligence makes a difference, they are not undervalued and have even further to go.
Remember to continuously diversify and invest for the long term. There will always be volatility in the markets and perhaps overvaluing, but there is money to be made in long-term investing.