Tech Has Led for 20 Years. Bonds Yield Over 5%. What If Your Biggest Risk Is What You Don’t Own?

Massive capital allocation into artificial intelligence and the resulting strain on energy infrastructure define the current market landscape. While tech stocks have sustained a 20-year secular outperformance, this trend has fostered significant investor complacency, leaving portfolios vulnerable to potential reversals. Data center electricity requirements now threaten to outpace U.S. power generation capacity, forcing a difficult reallocation of energy resources that will likely impact consumers. Amidst these high-valuation tech bets, fixed income has regained relevance as a viable portfolio component, offering competitive yields for the first time in decades. Although government backstops remain a possibility for "too big to fail" entities, significant market pain will likely precede any such intervention, as the economy navigates the transition from inflation concerns to potential recessionary pressures.