The Clark Howard Podcast 10.28.25 Ask An Advisor With Clark Howard & Wes Moss
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Oct 28, 2025 In a thought-provoking discussion, Clark and Wes tackle whether the stock market is dangerously overvalued amidst AI-driven dynamics. They explore the implications of private equity in 401(k) plans, highlighting potential fees and risks for everyday investors. Clark warns about transparency issues, while Wes sees a chance for improvement in accessibility and costs. Listeners also learn about the importance of diversification and maintaining a balanced portfolio in today's landscape, ensuring a cautious approach to investing.
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AI Spend Is Funded By Profits, Not Leverage
- Current AI-driven spending differs from the dot-com era because profitable mega-cap firms are funding development from free cash flow.
- That makes some investments more rational but still risks overpaying for expected future gains.
Dot‑Com Memories Fuel Caution
- Clark recalled the dot-com crash and companies like Webvan and Pets.com that soared then collapsed.
- He used those failed pioneers to warn that many AI startups may never produce lasting value.
Cap Weighting Inflates Apparent Risk
- Market P/E sits well above long-term averages, driven higher by mega-cap weighting.
- Equal-weighted indices show lower valuations but ordinary investors mostly hold cap-weighted funds.