Ask The Compound

How to Time the AI Bubble

7 snips
Oct 29, 2025
Bill Sweet, CFO of Ritholtz Wealth Management, shares his insights on various financial strategies. He dives into the complexities of timing the AI bubble and the importance of trend-following to mitigate losses during market crashes. Sweet also explores the balance between financing a home purchase from parents versus renting and stresses prioritizing retirement contributions over educational savings. The discussion wraps up with tips for buying a vacation home, detailing tax implications and practical advice on rentals.
Ask episode
AI Snips
Chapters
Books
Transcript
Episode notes
ADVICE

Use Trend Following As An Insurance Policy

  • Use a 10-month (≈200-day) moving average to switch between stocks and cash monthly as a trend-following rule.
  • Move the threshold up as the market rises and accept occasional whipsaws as the insurance cost for avoiding large crashes.
INSIGHT

Trend Following Lowers Volatility, Not Perfect Timing

  • Trend following aims to deliver stock-like returns with much lower volatility and smaller drawdowns over time.
  • It shines in rare, severe crashes but costs you in long whipsaw periods and missed rebounds.
ADVICE

Put Active Timing In Tax-Deferred Accounts

  • Run trend-following strategies in tax-deferred accounts to avoid frequent short-term capital gains taxes.
  • Use the strategy on a portion of your portfolio as a behavioral release valve, not the entire portfolio.
Get the Snipd Podcast app to discover more snips from this episode
Get the app