Bull Market Defies Obstacles, But AI and High Valuations Temper Outlook for Continued Exceptional Returns
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Stock markets have seen an extraordinary bull run since 2010, defying issues like interest rate hikes, trade wars, and economic slowdowns.
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Investor optimism is being driven in part by excitement about AI and its profit potential, seen in Nvidia's surging earnings.
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However, it's unclear which companies besides Nvidia will profit from AI, and competition may limit profits.
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Even if AI transforms societies, stocks may underperform over the next decade due to high valuations and limits on profit growth.
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After an exceptional "golden age," investors should temper their expectations for equity returns going forward.