AI is generating intense interest in terms of the potential implications of the underlying technology as well as the extraordinary progress and explosive share growth of companies such as Nvidia and Super Micro Computer. Multiple short-term speculative opportunities are available of course supported by technical analysis and a considerable variety of algorithmic trading strategies. Investors, however, should try to take a deep breath and adopt a longer-term view as they manage their portfolios. This does pose a considerable challenge. A recent article from The Economist was most interesting in this regard. It points out that whilst stock markets are booming, fundamentally, the good times are unlikely to last. https://lnkd.in/dYCeveaP Many interesting and very relevant issues are raised. In the US and Europe, much of the recent growth in corporate profits is significantly due to the decline in interest and corporate tax rates rather than to improved operating performance. Additionally, share valuations are at eye-popping levels, with the Shiller cyclically adjusted price-to-earnings ratio, or CAPE, flashing red signals and nearly at an all-time high. The message is “caveat emptor”, and certainly, as far as asset allocation is concerned, it is wise not to put all your eggs in one basket!