How to Diversify Away From AI When It’s Everywhere

Impact of AI on Investments: Artificial intelligence (AI) is pervasive across all investment sectors, affecting both large public companies and retail portfolios.
Concentration Risks: The Magnificent Seven, leading AI-beneficial stocks, constitute a substantial part of major investment funds, raising concentration risks.
Diversification Strategies: Investors are exploring ways to diversify away from AI exposure, such as investing in sports teams, royalties, and non-US equities that have less technology exposure.
Alternative Investments: Options like utilities, energy, telecommunications, and real estate remain viable despite AI’s dominance, providing potential diversification benefits.
Real Assets: Investments in sectors like natural resources, real estate, non-tech industries, and gaming REITs are seen as uncorrelated to AI trends.
Future Outlook: While total AI avoidance isn’t feasible, building “shock absorbers” in portfolios by including non-growth or alternative asset classes is recommended to hedge against potential AI downturns.