The major US indexes were rocked by a three-day global market sell-off earlier in the week, with the tech sector, in particular, experiencing the most significant dips. Glenmede senior investment strategist Jason Pride joins Catalysts to discuss the current role of AI in the tech industry and how investors can best position their portfolios amid broader market volatility.
Pride says that overall, he is “very positive on the longer-term outcomes of innovation cycles” like AI. He notes that AI has sparked one of the bigger innovation cycles the market has seen, yet expresses some caution: “Historically, we’ve seen a pattern of hype followed by disappointment when things just don’t come through and be realized on a fast enough basis as markets often expect them to be, followed by an eventual cycle of realization.” He explains that Wall Street is looking for real results from AI investments in Big Tech, and is disappointed with some of the latest earnings: “It’s not unusual for the stock market to be a little bit short-minded and look at it and say, ‘We don’t like getting paid back three years from now for something that we spent today. We like to see profits now from things we spent now.'”
For investors looking to play the current market, Pride’s biggest piece of advice is to get an understanding of your baseline allocations in different areas of the market. Once that’s established, he encourages investors to “rebalance, don’t chase” market volatility: “When the market’s down a lot, don’t chase the market down a lot. Use the volatility to rebalance your portfolio… Get yourself on target with your investment approaches, and that will be the better, longer-term strategy in an environment that’s like this, with this sort of volatility and risk.”
For more expert insight and the latest market action, click here to watch this full episode of Catalysts.
This post was written by Melanie Riehl
