Hey everyone! Are you feeling anxious about the stock market like I am? Lately, I’ve been increasingly concerned. The market keeps climbing, yet many regular folks are struggling to make ends meet. AI stocks are propelling the market to new heights, reminiscent of the dot-com bubble from 25 years ago. Can you believe it’s been that long? Back then, everyone was eager to invest in any dot-com company, leading to a meteoric rise in stock prices, only for the bubble to burst eventually. I can’t shake the feeling that AI stocks might be on a similar path. The timing of a potential crash is uncertain—it could be 2-3 years down the line. But when it happens, it’s likely to be significant. Are you prepared to see your net worth potentially halved? That’s what occurred after the dot-com bubble burst, and I’m too seasoned to endure that kind of portfolio hit again.
In my younger days, I had a decent income and panicked a bit, selling off some stocks. However, I eventually re-entered the market. The key takeaway was the importance of continuing to invest through bear markets. The market does recover, and dollar-cost averaging can significantly enhance your investment returns.
Today, the landscape is quite different. Both Mrs. RB40 and I are retired and in the withdrawal phase. Unlike before, we don’t have the income to weather a stock market crash. We must be more strategic when the AI bubble inevitably collapses. That’s why I’ve sold some U.S. stocks and diversified into bonds, cash, and international stocks. I’m taking a more conservative approach with our investments. We still need to remain invested, as our retirement could last over 40 years. For now, I feel relatively secure; we can withstand a market crash without liquidating a significant portion of our U.S. stocks.
However, as AI stocks continue to inflate, we find ourselves with considerable paper gains. I hold shares in NVDA, META, GOOG, and a substantial amount in the S&P 500 index fund. While I want to let these investments ride, I’m also contemplating cashing out some gains. Is it time to convert some of that paper wealth into tangible assets?
Tangible Assets
The stock market is a fantastic investment avenue, but it often feels like we’re dealing with Monopoly money. Let’s explore some tangible assets we might consider investing in.
Real Estate
Real estate is a classic alternative to stocks. Properties typically appreciate over time, and many homeowners are sitting on significant gains. For us, investing in a duplex and a condo has proven fruitful. However, I’m not keen on being a landlord forever; it’s a lot of work. In a few years, I’d like to consolidate our real estate holdings into a single primary residence.
Sometimes, I ponder selling a chunk of stocks to invest in a luxurious home to lock in those gains. Just kidding! I prefer a smaller house for easier maintenance. Mrs. RB40, however, dreams of a bigger, nicer home, which is why we’re currently remodeling our kitchen. The downside of an expensive house is the skyrocketing monthly expenses—utilities, property taxes, insurance, and maintenance can add up quickly. Personally, I’d rather keep our housing costs low.
Ultimately, real estate is a solid option for parking money outside the stock market. You can also consider REIT funds like VNQ as a viable alternative.
Precious Metals
Gold prices have surged, reaching over $4,000 per ounce in October 2025. While I don’t have much gold—just our wedding bands—I recognize its value as a hedge during turbulent times. Gold tends to hold its worth when chaos reigns. Although I don’t foresee a civil war, the current socio-political climate is concerning. If things deteriorate, gold would be easy to transport if we needed to flee. However, I’m unsure where to store it safely; hiding it at home feels risky.
Crypto
Cryptocurrency aims to serve as an alternative to the stock market and the U.S. dollar, but it remains highly speculative. Prices often plummet alongside the stock market during major announcements. The crypto space seems rife with manipulation, leaving regular investors vulnerable. I don’t trust it, and I’d likely be one of those who loses access to my crypto due to misplaced passwords or hardware failures.
Art and Collectibles
Investing in art and collectibles is popular among the wealthy, but I lack expertise in this area. Storage and insurance costs can add up, and I worry about potential damage—especially with a clumsy teenager in the house.
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What other tangible assets can appreciate in value? I’m not interested in buying a depreciating truck or anything similar. Do you have any suggestions?
Problems with Real Assets
Converting paper gains into tangible assets is more challenging than I anticipated. Storage and maintenance costs are significant concerns. The only real investment I’m willing to make right now is in a nicer house. However, we might not qualify for a mortgage anymore. We plan to sell our duplex and rental condo to purchase a new home in a few years, which may also require selling some stocks. Moving assets can be a hassle.
If you’re reading this, there’s a good chance you’re sitting on substantial paper gains. Are you considering converting some of that into real assets?
Image credit: The AI overlord made the image for this blog post.
