Every few months, someone announces with total certainty that a global stock market crash is imminent. This time, the warnings centre on the “AI bubble” — soaring tech valuations, trillion-dollar companies, and the belief that the world has become too excited about artificial intelligence for its own good.
Are the prediction-makers right? Could we be on the edge of a major downturn?
The honest answer — the only honest answer — is this:
Nobody knows. Not economists, not commentators, not investors… and certainly not the people who speak with the most confidence.
What we do know is that market crashes have always been impossible to predict with accuracy. History keeps proving it.
The AI Bubble Fears
The argument today goes something like this:
- AI stocks have risen too fast
- Valuations look overheated
- Expectations are sky-high
- Companies are spending heavily on infrastructure
- Investors may be overestimating short-term profits
Could this end in tears? Absolutely. All bubbles eventually burst.
But could AI also transform the world, boost productivity, create new industries and justify substantial long-term value? Absolutely again.
That’s the trouble with bubbles: while they’re inflating, it’s impossible to know whether you’re witnessing irrational mania… or the early stages of a genuine technological revolution.
The same confusion happened before — many times.
History Shows Crashes Are Never Predictable
1987: Black Monday
On 19 October 1987, markets around the world fell more than 20% in a single day.
Virtually nobody predicted it.
Almost everybody afterwards claimed they “knew it was coming”.
The crash was so sudden and so severe that even regulators and economists were stunned. And markets recovered far faster than anyone expected.
2000–2002: The Dotcom Bubble
By the late 1990s, investors were euphoric about the Internet. Companies with no profits — sometimes not even a product — saw valuations soar simply for adding “.com” to their names.
Everyone knew it was frothy.
Nobody knew when it would implode.
But when it did, trillions were wiped out.
Yet, out of the rubble emerged Amazon, Google and the foundations of the modern digital economy. The bubble was painful — but it wasn’t the end.
2007–2009: The Great Financial Crisis
The biggest crash of our lifetimes began in the US housing market. A few analysts warned about dangerous lending practices — but the vast majority of experts, banks and governments did not anticipate the scale of what was coming.
The crash arrived anyway.
Markets collapsed.
Economies seized.
Confidence evaporated.
And yet… markets recovered. They always do. Just not on our preferred timetable.
The Uncomfortable Truth
Here’s the reality investors hate to accept:
“The market can stay irrational longer than you can stay solvent,” — the British economist John Maynard Keynes (not Warren Buffett)
In other words:
- Markets don’t follow rules
- They don’t care about forecasts
- They don’t move when people expect
- They often defy logic entirely
You can be convinced a crash is coming — and still be wrong for years.
So… Will There Be a Crash?
Eventually, yes.
Crashes are part of investing.
But is a crash imminent because of the AI boom?
Nobody knows. And anyone who claims certainty is guessing.
The stock market has always moved in cycles:
- enthusiasm → boom
- doubt → wobble
- fear → crash
- recovery → growth
- repeat
Today we’re somewhere between enthusiasm and boom.
Tomorrow? Impossible to say.
What Should Investors Do?
The answer is surprisingly simple:
1. Avoid trying to time the market
People who jump in and out based on predictions often do worse than those who stay invested.
2. Diversify
Own different types of assets — shares, bonds, property, gold — so one bubble doesn’t sink your whole plan.
3. Invest for decades, not months
Markets crash. Markets recover. Long-term investors almost always win.
4. Focus on your plan, not headlines
The goal isn’t to avoid every downturn — it’s to grow wealth over time.
Final Thought
Crashes are scary. Predictions are tempting.
But the history of investing teaches one very clear lesson:
It’s impossible to predict exactly when bubbles burst — but it is absolutely possible to build wealth through them.
Stay calm.
Stay diversified.
Stick to your plan.
Because while markets crash and recover, time in the market beats timing the market — every single time.*
Tony Byrne, Managing Director
If you want to learn more about this topic, please find the link here.
More information about our fund can be found here: Hargreaves Lansdown or AJ Bell.
*Risk warnings
The value of investments can fall as well as rise. You may not get back what you invest. The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction. All information is based on our current understanding of taxation, legislation, regulations and case law in the current tax year. Any levels and bases of relief from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This blog is based on my own observations and opinions.
