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Dalio Warns: AI Bubble Won't Burst Yet, Exiting Now is Premature
Summary: Billionaire investor and Bridgewater Associates founder Ray Dalio warned against prematurely exiting the artificial intelligence (AI) sector, even if concerned about a market bubble waiting to burst. In an interview with CNBC on Thursday, he expressed his belief that the current stock market is deeply entrenched in a bubble, but this is not a reason ...
Billionaire investor and Bridgewater Associates founder Ray Dalio warned against prematurely exiting the artificial intelligence (AI) sector, even if concerned about a market bubble waiting to burst. In an interview with CNBC on Thursday, he expressed his belief that the current stock market is deeply entrenched in a bubble, but this is not a reason for investors to abandon AI trading.
Dalio explained to the media that investors should stay in the market for a simple reason: the conditions for the bubble to burst simply do not exist at the moment. Instead of selling just because of a bubble, the legendary fund manager said, you need to time it right. What typically bursts a bubble? It's usually tight monetary policy, which we are not facing right now.
In Dalio's view, the bubble will only burst when there is a demand for asset liquidation in the market. He speculated that events like Fed rate hikes or consumers facing wealth taxes could trigger sell-offs. However, these scenarios seem unlikely in the foreseeable future.
I want to reiterate that the stock market could see significant gains before the bubble bursts, Dalio added.
