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Advisors weigh AI bubble risks as they plan for a potential pullback
Bridgewater founder Ray Dalio warned that investor liquidity could become scarce in a downturn, highlighting the gap between wealth and spendable cash.
Yahoo Finance reports that as concerns about an AI-driven stock market bubble build, many financial advisors are positioning themselves for a possible correction while trying to avoid unnecessary churn in client portfolios.
The article cites recent remarks from Bridgewater Associates founder Ray Dalio, who emphasized that wealth is not the same as money, arguing that people can appear wealthier without having cash they can use during a market pullback.
According to Yahoo Finance, Jon Lapp, founder of Haven Financial Advisors, said he adjusts strategies only when clients' risk tolerance or investment goals change. He added that attempting to time downturns without a change in those factors has not helped clients in the long run, even when clients push for timing decisions.
The piece also frames the central dilemma for advisors as balancing preparation for worse case scenarios with the risk of damaging long term savings if markets continue rising.