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One of the most powerful forces driving the U.S. stock market may be resting on a surprisingly fragile foundation. <\/p>\n
Billionaire entrepreneur Mark Cuban and “Big Short” investor Michael Burry are now raising the same unsettling concern: One unexpected disruption could bring the entire boom crashing down. <\/p>\n
Must Read <\/p>\n
Cuban pointed directly to Nvidia (NASDAQ:NVDA) and its central role in financing the artificial intelligence boom. <\/p>\n
“You never know where an exogenous change is going to come from. This is so analogous to the dot-com burst. But instead of IPOs, Nvidia is the ‘ipo,’ funding everyone and anyone,” Cuban wrote in a post on X (1). <\/p>\n
“One breakthrough in another chip provider, or a misstep and it all could crumble. It’s truly scary.” <\/p>\n
Burry echoed those concerns, pointing to a sharp rise in the cost of insuring Nvidia’s debt against default. <\/p>\n
“There is a reason $NVDA’s 5-year credit default swaps are going parabolic,” he wrote (2). “All this overreaching by #nvda to push the circular spending to biblical proportions.” <\/p>\n
Their warnings arrive at a delicate time for investors. <\/p>\n
Nvidia has grown into one of the largest and most influential companies in the world, while AI-related stocks have become increasingly important to the performance of major market indexes. <\/p>\n
That means the potential fallout could extend far beyond investors who deliberately bought Nvidia shares. <\/p>\n
Americans held $9.9 trillion in 401(k) plans at the end of the first quarter, including $3.3 trillion invested in equity mutual funds, according to the Investment Company Institute (3). IRAs contained another $4.2 trillion in equity funds. <\/p>\n
Many of those retirement accounts hold funds that track or resemble the S&P 500, where Nvidia represents roughly 7.3% of the index. Meanwhile, information technology stocks now make up 38% (4) of the S&P 500, while major AI spenders like Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Meta (NASDAQ:META) also ranked among its largest holdings. That means billions \u2014 and potentially hundreds of billions \u2014 of dollars in Americans’ retirement savings may be indirectly exposed to the chipmaker and the wider AI boom. <\/p>\n
‘The biggest investment bubble in American history’ <\/p>\n
Cuban and Burry are not the only prominent investors sounding the alarm. <\/p>\n
Legendary investor Jeremy Grantham, who famously warned about the 2000 dot-com bust and the 2008 financial crisis, recently described<\/a> the current market as “the biggest investment bubble in American history.” <\/p>\n Grantham said high-flying AI stocks “will probably come down a lot.” But his warning extends far beyond the tech sector. He believes the entire U.S. stock market is headed for a brutal reckoning. <\/p>\n “The market’s going to peak out and drop back to trend. And getting back to trend from here is closer to a 70% decline than a 50%,” he warned. <\/p>\n That is a dire forecast \u2014 and one that could carry serious consequences for millions of Americans whose retirement savings are heavily exposed to equities. <\/p>\n Whether or not you buy into these warnings, the message is difficult to ignore: When valuations are stretched and a group of dominant stocks increasingly depends on the fortunes of one industry \u2014 or even one company \u2014 putting all your eggs in one basket can be dangerous. <\/p>\n Here are three simple ways to diversify beyond traditional stocks. <\/p>\n Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going<\/a> <\/p>\n Own what Wall Street can’t print <\/p>\n When storm clouds gather over the markets, gold often steps back into the spotlight \u2014 and for good reason. <\/p>\n Long seen as the ultimate safe haven, gold isn’t tied to any single country, currency or economy. It can’t be created at will by central banks like fiat money and in times of economic turmoil, market turbulence or geopolitical uncertainty, investors tend to pile in \u2014 driving up its value. <\/p>\n Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has repeatedly emphasized gold’s role in building a resilient portfolio. <\/p>\n “People don’t have, typically, an adequate amount of gold in their portfolio,” he told CNBC<\/a> last year. “When bad times come, gold is a very effective diversifier.” <\/p>\n The market has already taken notice. Over the past five years, as inflation continued to erode the value of paper currency and investors looked for protection outside traditional stocks, gold has climbed 122%. <\/p>\n Other prominent voices see further potential. JPMorgan CEO Jamie Dimon has said<\/a> that in this environment, gold can “easily” rise to $10,000 an ounce. <\/p>\n One way to invest in gold that can also provide significant tax advantages is to open a gold IRA with the help of Goldco<\/a>. <\/p>\n Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax advantages of an IRA with the protective benefits of investing in gold<\/a>, making it a compelling potential option for those wanting to ensure their retirement funds are diversified during rough economic times. <\/p>\n Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver<\/a>. <\/p>\n If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today<\/a>. <\/p>\n Income, even in a down market <\/p>\n Like stocks, real estate has its cycles, but it doesn’t rely on a booming market to generate returns. <\/p>\n Even during a recession, high-quality, essential real estate can continue to produce passive income through rent. In other words, you don’t have to wait for prices to rebound to see a payoff \u2014 the asset itself can work for you. <\/p>\n It’s also a time-tested hedge against inflation. As the cost of materials, labor and land rises, property values often increase as well. At the same time, rental income tends to climb, giving landlords a revenue stream that adjusts with inflation. <\/p>\n Owning rental property allows investors to collect monthly rent payments, but being a landlord is rarely as passive as it sounds. <\/p>\n Managing a property involves finding and screening tenants, collecting rent and handling maintenance and repair requests (out of your own pocket) \u2014 and that’s assuming you can save enough for a down payment and get a mortgage to buy the property in the first place. <\/p>\n The good news? These days, you don’t need to buy a property outright to invest in real estate. Mogul<\/a> is a crowdfunding platforms that offers an easier way to get exposure to this income-generating asset class. <\/p>\n As a real estate investment platform offering fractional ownership in blue-chip rental properties<\/a>, the option gives investors monthly rental income, real-time appreciation and tax benefits \u2014 without the need for a hefty down payment or 3 a.m. tenant calls. <\/p>\n Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide<\/a> for you. In other words, you gain access to institutional-quality offerings for a fraction of the usual cost. <\/p>\n Each property undergoes a rigorous vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Offerings often sell out in under three hours<\/a>, with investments typically ranging between $15,000 and $40,000 per property. <\/p>\n Sign up for an account and browse available properties here<\/a> to start investing today. <\/p>\n Another option is Lightstone DIRECT<\/a>, which gives accredited investors access to single-asset multifamily and industrial deals. <\/p>\n Lightstone DIRECT’s direct-to-investor model<\/a> ensures a high degree of alignment between individual investors and a vertically integrated, institutional owner-operator \u2014 a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate. <\/p>\n With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets<\/a> Lightstone pursues with its own capital, with minimum investments starting at $100,000. <\/p>\n An asset outside Wall Street’s frenzy <\/p>\n “It’s likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months.” <\/p>\n That’s according to Goldman Sachs CEO David Solomon, speaking at the Global Financial Leaders’ Investment Summit in November 2025. <\/p>\n Meanwhile, the Shiller P\/E has just soared past 40x, a level last seen in 1999, hinting that the decade ahead may bring below-average returns for those tied to the S&P 500. <\/p>\n With these warning signs, diversification isn’t just smart \u2014 it’s essential. <\/p>\n Billionaires like Jeff Bezos and Bill Gates continue to invest heavily in stocks, but they also carve out a portion of their portfolios for assets that behave differently from the market. <\/p>\n One standout example: post-war and contemporary art. This vertical outpaced the S&P 500 by 15% from 1995 to 2025 while showing near-zero correlation to traditional equities. <\/p>\n Until recently, this world was off-limits to everyday investors. Now, with Masterworks<\/a>, you can buy fractional shares in multimillion-dollar works by icons like Banksy, Picasso and Basquiat. While art can be illiquid and typically requires a long-term hold, it offers unique portfolio diversification. <\/p>\n Masterworks has sold 31 artworks so far, yielding net annualized returns like 14.6%, 17.6% and 17.8%.* <\/p>\n Moneywise readers can get priority access to diversify with art: Skip the waitlist here<\/a>. <\/p>\n *Past performance is not indicative of future returns. Investing involves risk. See important Regulation A disclosures at Masterworks.com\/cd<\/a>. <\/p>\n You May Also Like <\/p>\n Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now<\/a>. <\/p>\n Article Sources <\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>. <\/p>\n X (1<\/a>), (2<\/a>); ICI (3<\/a>); S&P Global (4<\/a>) <\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind. <\/p>\n","protected":false},"excerpt":{"rendered":"Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. 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