# I'm Changing How I Invest My Money Because of AI Source: https://www.youtube.com/watch?v=O8t50OxsfB8 Recap page: https://rapidrecap.app/video/O8t50OxsfB8 Generated: 2026-03-13T13:29:56.791+00:00 --- ## Quick Overview The investor is changing their investment strategy due to Artificial Intelligence (AI) by reducing exposure to the market-cap-weighted S&P 500, betting more on global markets, adopting a negative momentum approach to avoid speculative AI hype stocks, and increasing gold holdings as a hedge against system instability. **Key Points:** - The investor is reducing the allocation to the market-cap-weighted S&P 500 because the top 10 companies, heavily influenced by AI valuations, now account for 40% of the index, compared to 2% in an equal-weighted index. - The new strategy involves betting more on the global stock market, specifically citing the historical dominance of the US market (61% in 2020) and the need for diversification away from it. - The investor is adopting a 'negative momentum' approach, automatically selling stocks that start to lose momentum, which helps avoid companies currently valued on future expectations rather than current earnings (like many AI-related firms). - To hedge against potential instability caused by AI hype and excessive debt financing of AI infrastructure, the investor is increasing holdings in physical gold, noting that central banks are also increasing gold reserves. - The investor is keeping a large cash reserve (Berkshire Hathaway's Q1 2025 cash pile reached $347.7 billion) to capitalize on market crashes, which Warren Buffett, a value investor, traditionally does. - The investor favors small and mid-cap companies in 'Zone Four' (Reasonable Valuation, Small Market Cap) because they are overlooked and not reliant on the AI hype cycle for growth. ![Screenshot at 1:05: The video introduces the first change in strategy: reducing investment into the market-cap-weighted S&P 500 due to the high concentration of the top 10 stocks, illustrated by a pie chart showing the top 10 making up 40% of the index.](https://ss.rapidrecap.app/screens/O8t50OxsfB8/00-01-05.jpg) **Context:** The speaker, Mark Tilbury, discusses five significant changes he is making to his personal investment strategy, primarily motivated by the rapid rise and valuation of Artificial Intelligence (AI) related companies and the perceived instability in the global financial system. He contrasts the heavily concentrated market-cap-weighted S&P 500 with an equal-weighted approach to illustrate the dominance of a few large tech stocks, and references historical market shifts, like Japan's dominance in the late 1980s, to caution against overconcentration. ## Detailed Analysis The speaker outlines five major changes to his investment strategy influenced by the rise of AI. The first change is reducing investment in the market-cap-weighted S&P 500 because the top 10 companies (like Nvidia at 7.6%, Microsoft at 6.7%, and Apple at 6.6%) now constitute about 40% of the index, leaving only 59.9% for the remaining 490 companies. He contrasts this with an equal-weighted S&P 500 where all 500 companies have an even slice. The second change is betting on the world, not just the US, citing historical data (1900-2020 chart) showing that the US market's dominance (61% recently) has not always been the case, referencing Japan's dominance in the late 1980s. The third change involves backing the 'underdogs' (Zone Four: Small Cap, Reasonable Valuation), avoiding the highly speculative, hyped stocks in the 'Crowded Zone' (like Nvidia, Tesla, Meta) which are priced for massive future returns. The fourth change is hedging against system instability, specifically the potential AI bubble and the debt used to finance AI infrastructure, by increasing gold reserves, noting that central banks (like China) are aggressively buying gold. The fifth change is ensuring he is never forced to sell by maintaining a large cash reserve (citing Berkshire Hathaway's $347.7B in Q1 2025) and employing dollar-cost averaging into global, diversified ETFs like VWRP, thus avoiding selling during market crashes. He concludes that avoiding the system's instability and buying undervalued assets are key to building wealth. ### Strategy Change 1 (S&P 500 Reduction) - I'm putting less money into the S&P 500 because 40% of the index is now in the top 10 companies, whereas an equal-weighted index treats all 500 companies evenly - The top 10 companies currently make up about 40% of the index, with Nvidia alone at 7.6%. ### Strategy Change 2 (Global Betting) - I'm betting on the world; historical data shows US market dominance (61% recently) is not permanent, citing the 1980s when Japan outperformed. I am favoring global diversification. ### Strategy Change 3 (Backing Underdogs) - I am backing small and mid-cap companies in Zone Four (Reasonable Valuation, Small Market Cap), avoiding the 'Crowded Zone' (Large Cap, Expensive Valuation) stocks like Nvidia, Tesla, and Meta, which are highly speculative. ### Strategy Change 4 (Hedging Against System) - I am hedging against system instability, particularly an AI bubble fueled by debt, by increasing gold reserves; China's gold reserves show a massive recent spike. ### Strategy Change 5 (Never Forced to Sell) - I maintain a large cash reserve (like Berkshire Hathaway's $347.7B in Q1 2025) to buy assets cheaply during market crashes, and I dollar-cost average into global funds like VWRP to maintain flexibility. ![Screenshot at 1:05: The pie chart illustrating the market-cap-weighted S&P 500 concentration, showing the top 10 companies taking up a significant portion of the index.](https://ss.rapidrecap.app/screens/O8t50OxsfB8/00-01-05.jpg) ![Screenshot at 4:08: Comparison graphic showing the highly concentrated Market-Cap Weighted S&P 500 \(left\) versus the evenly distributed Equal-Weighted S&P 500 \(right\).](https://ss.rapidrecap.app/screens/O8t50OxsfB8/00-04-08.jpg) ![Screenshot at 6:07: Area chart displaying 'The Evolution of Equity Markets Over Time,' highlighting the US market's share \(pink area\) relative to global markets since 1900.](https://ss.rapidrecap.app/screens/O8t50OxsfB8/00-06-07.jpg) ![Screenshot at 10:10: A promotional screen showing how to redeem a free fractional shares offer using the promo code 'TILBURY' within the investment app.](https://ss.rapidrecap.app/screens/O8t50OxsfB8/00-10-10.jpg)