The Clark Howard Podcast 11.04.2025 Ask An Advisor With Wes Moss
12 snips
Nov 4, 2025 Dive into the world of finance as Wes Moss exposes the hefty weight AI stocks hold in the S&P 500. He offers smart strategies for rebalancing your portfolio to mitigate risks. The episode also unpacks the new Social Security COLA increase, showing its impressive history of outpacing inflation since 1975. Plus, Wes demystifies the Social Security trust fund concerns and evaluates important considerations for retirement planning, like when to sell ESPP shares and the implications of Roth conversions for older adults.
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AI Stocks Dominate Market Returns
- JP Morgan identified 41 AI-related stocks that make up about 8% of the S&P 500 by count but nearly 47% of its market weight.
- Those 41 stocks delivered roughly 74% of the S&P's returns over three years, creating a concentrated market theme.
Recent Returns Are Highly Skewed
- Since November 2022 the 41 AI stocks rose about 190% while the other 459 S&P companies rose ~27%.
- The broader non-AI market returned little, making the S&P's gains highly skewed toward the AI group.
Rebalance To Reduce AI Overweight
- Rebalance away from concentration by using equal-weight ETFs, adding mid/small caps, and diversifying internationally.
- Hold safety assets like Treasuries or high-quality corporate bonds to reduce exposure to the single AI theme.