Is a tech bear market coming? A 40-year strategist’s warning

Market volatility stems from deep-seated investor complacency following a historic 20-year leadership run by technology stocks. While artificial intelligence remains a potent long-term economic driver, current market behavior—marked by emotional price swings and increased corporate debt—suggests an unsustainable divergence where a small tech-heavy sector booms while the broader economy stagnates. Jim Paulsen, a 40-year veteran strategist, advises shifting toward defensive, high-quality assets in utilities, healthcare, and industrials to mitigate risk. Furthermore, historical seasonal trends, such as the typical November-to-April rally, face significant downside risk this year due to restrictive forces like rising bond yields and oil prices. Investors should anticipate continued disappointment as the market corrects, rather than assuming a post-midterm recovery will automatically restore stability.