AI – more disruptive than war

Source: New York Times

  By Guest Blogger Sinan Terzioglu

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Artificial intelligence has gone from a futuristic concept to something that is already changing how companies operate and how people work. As it accelerates, it is raising important questions, not just about jobs, but about what it all means for the broader economy and financial markets.

I was recently asked the following question:

“I read a post from Citrini Research titled The 2028 Global Intelligence Crisis, which outlines a scenario where rapid AI adoption leads to widespread white-collar job losses, weaker consumer spending, and a negative economic feedback loop that ultimately pressures the U.S. stock market to drop 38% from its high.
 
Over the past few weeks, I’ve been watching software stocks sell off after Anthropic rolled out agent-style tools that automate large parts of legal, research, security, and other white-collar workflows including parts of my own job. That’s made the risk of AI-driven disruption feel much more personal.
 
Shortly after Citrini’s post, Block said it would cut more than 4,000 jobs as it shifts more work to AI. When developments like this stack up so quickly, the scenario Citrini described starts to feel less hypothetical and more like something that could already be playing out.
 
Given all of that, should I be reconsidering my 60/40 portfolio and potentially making a significant reduction in my equity risk?”

Pieces like the one from Citrini Research tend to resonate because pessimism often sounds sophisticated, especially when it blends legitimate concerns about AI, employment, and financial markets into a compelling narrative. But stories shouldn’t override sound, long-term investment thinking.

Every major technological shift has sparked anxiety about employment and social stability. The industrial revolution, electrification, computers, the internet, and automation all displaced certain types of work while creating entirely new industries and opportunities that were difficult to imagine in advance. In the short term, these transitions can be disruptive and uneven. In the long term, however, productivity gains have consistently supported a growing economy, improved living standards, and stronger corporate profitability, trends that global equity markets have reflected over time.

One of the most underappreciated advantages an investor can have is an optimistic long-term outlook. This doesn’t mean ignoring risks or assuming every new technology will be a net positive in the short term. It means starting from the assumption that human adaptability, capital markets, and businesses have a long track record of adjusting to change and putting it to productive use.

Warren Buffett has never been known for embracing new technology, and he has openly acknowledged that he doesn’t fully understand many of the advances over the years. Even so, his entire investing career has been built on a fundamentally optimistic view of long-term economic growth, business expansion, and productivity gains. He has emphasized that fearing progress is a losing strategy, often noting that despite wars, political turmoil, recessions, and inflation, the long-term value of productive businesses has continued to rise.

From an investment standpoint, this is exactly why balance and global diversification are so important. Equities provide long-term exposure to innovation and productivity gains, while high-quality fixed income securities help stabilize portfolios during periods of economic stress and market volatility. Reducing risk in response to pessimistic narratives may feel prudent, but it often leads investors to make macro-driven decisions at precisely the wrong time.

As Warren Buffett has long cautioned, trying to position portfolios based on broad economic forecasts is rarely a reliable path to success:

“You don’t want to get hung up making macroeconomic analysis. You don’t get rich doing that.”

History supports this view. We could say the same of over-analyzing the effects of war on a moment in time, or on a handful of stocks.

A surprisingly small group of equities has accounted for most long-term equity market returns, and there’s little reason to believe that will change going forward. The challenge is that the eventual winners are almost impossible to identify in advance and many of them likely haven’t even been created yet. Rather than trying to guess which companies, regions, or industries will lead the next cycle, a more dependable strategy is to remain broadly invested.

From that perspective, global diversification is less about making bold predictions and more about acknowledging uncertainty. The objective isn’t to be precisely right about the next dominant theme, region, or breakthrough technology, but to avoid being overly dependent on any single outcome. By staying broadly invested across global markets, investors improve the likelihood of owning at least some of the companies that ultimately drive the next wave of wealth creation wherever they emerge. This approach has been rewarded through past industrial shifts, periods of globalization, and the digital revolution, and there is little reason to expect the AI era to unfold any differently.

Artificial intelligence will almost certainly reshape the economy in ways that surprise us, both positively and negatively. But trying to sidestep every potential disruption by constantly de-risking portfolios is far more likely to erode long-term returns than protect them. For most investors, staying invested, diversified, rebalancing thoughtfully, and focusing on what can be controlled remains the most reliable response to a rapidly changing world.

Sinan Terzioglu, CFA, CIM, is a financial advisor with Turner Investments, Private Client Group, Raymond James Ltd.  He served as vice-president of RBC Capital markets in New York City and VP with Credit Suisse in Toronto.

Source: https://www.greaterfool.ca/2026/03/03/ai-more-disruptive-than-war/