Your Gains Are at Risk: What Albert Lu Would Hold Before the Next Drop

Albert Lu argues that the recent tech sell-off exposed how fragile the AI trade has become, with the market still highly concentrated in a handful of names and the underlying earnings and financing story far less certain than the excitement around the technology itself. He says investors should separate the promise of AI from the risks of speculative valuation, especially when a great technology does not guarantee great investment returns.

His framework is to participate in long-term growth without chasing the most aggressive early gains. He points to the dot-com bust as a reminder that it can take more than 10 years to recover losses, while still noting that internet-era winners eventually produced decades of compounding. In his view, investors can own the trend through less speculative parts of the market and should not feel forced to buy at any price.

Lu also says the macro backdrop is different from the era of falling rates, making bonds less reliable and cash more costly because of lost purchasing power. He prefers low-duration fixed income, remains cautious on long bonds, and sees gold as a useful inflation hedge. He is constructive on commodities over the long run, especially energy, copper and rare earths, while warning that leverage and credit stress are the places he would watch first for trouble.