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Elon Musk is the richest person in the world, but his approach to investing is surprisingly simple: He doesn’t really buy stocks.
In a wide-ranging interview with entrepreneur and investor Nikhil Kamath, Musk was asked which company he would buy — excluding his own businesses — if his sole objective were to make money.
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“I mean, I don’t really buy stocks,” Musk said (1). “I don’t look for things to invest in. I just try to build things.”
“And then there happens to be stock of the company that I built,” he added.
Indeed, the bulk of Musk’s fortune is tied to SpaceX (NASDAQ:SPCX) and Tesla (NASDAQ:TSLA), the companies he helped create. He said he does not maintain a traditional investment portfolio or spend his time weighing whether one publicly traded company is a better buy than another.
Still, to answer the question of which stocks he would buy to make money, he pointed to two of the most recognizable names in the artificial intelligence boom: Google and Nvidia.
“I think Google is gonna be pretty valuable in the future,” Musk said. “They’ve laid the groundwork for an immense amount of value creation from an AI standpoint. Nvidia is obvious at this point.”
Neither pick is exactly flying under Wall Street’s radar. But Musk’s reasoning reveals just how enormous he believes the economic impact of AI and robotics could become.
“There’s an argument that companies that do AI and robotics, and maybe space flight, are gonna be overwhelmingly all the value — almost all the value,” he said.
“The output of goods and services from AI and robotics is so high that it will dwarf everything else.”
Should you follow Musk into AI stocks?
AI and robotics have already become major forces driving the stock market.
Shares of Google parent Alphabet (NASDAQ:GOOGL) have gained 162% over the past five years, while Nvidia (NASDAQ:NVDA) has skyrocketed an eye-popping 952%.
But Musk’s comments came with an important disclaimer: He is not presenting himself as a professional stock picker.
His wealth was created primarily by building companies and retaining ownership in them — not by constructing a diversified portfolio designed to fund an ordinary retirement.
Most investors face a very different reality.
They have mortgages, retirement deadlines, college costs and monthly bills. They may not be able to tolerate watching a concentrated technology position pull back 30%, 40% or more while waiting for a long-term thesis to play out.
And while many investors remain optimistic about AI, some market watchers warn that U.S. stocks are caught in “the biggest investment bubble in history” — and that the high-flying AI names could have the furthest to fall when the bubble bursts.
That does not necessarily mean avoiding Alphabet, Nvidia or AI stocks altogether. But it does mean considering how much exposure makes sense within your broader portfolio rather than chasing a stock simply because a billionaire called it “obvious.”
That is where a financial advisor can help.
A qualified advisor can examine your entire financial picture — including your income, savings, retirement timeline, tax situation and risk tolerance — and help determine whether an investment fits your goals.
With Vanguard, you can connect with a personal advisor who can help assess how you’re doing so far and make sure you’ve got the right portfolio to meet your goals on time.
Vanguard’s hybrid advisory system combines advice from professional advisors and automated portfolio management to make sure your investments are working to achieve your financial goals.
All you have to do is fill out a brief questionnaire about your financial goals, and Vanguard’s advisors will help you set a tailored plan, and stick to it.
Hedge the AI frenzy
Musk’s prediction is undeniably bullish.
If AI and robotics eventually produce so many goods and services that they “dwarf everything else,” the companies controlling the technology could generate staggering profits.
But that same excitement has already helped funnel extraordinary amounts of money into a relatively small group of stocks.
Markets rarely move in a straight line. Expectations can change quickly when earnings disappoint, interest rates rise, competition intensifies or investors simply decide they have paid too much for distant profits.
One way to prepare for that risk is to hold assets that do not depend on the continued success of the AI trade — or on market enthusiasm.
That’s where gold often enters the picture.
Long seen as the ultimate safe haven, gold is not tied to the fortunes of any single company, country or currency. It can’t be created at will by central banks like fiat money, and in times of economic turmoil, market turbulence or geopolitical uncertainty, investors tend to pile in — driving up its value.
According to Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, it’s a piece many investors still overlook.
“People don’t have, typically, an adequate amount of gold in their portfolio,” he told CNBC last year. “When bad times come, gold is a very effective diversifier.”
One way to invest in gold that can also provide significant tax advantages is to open a gold IRA with the help of Goldco.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax advantages of an IRA with the protective benefits of investing in gold, making it a compelling potential option for those wanting to ensure their retirement funds are diversified during rough economic times.
Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.
If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today. Just keep in mind that gold is typically best used as one part — not a wholesale replacement — of a portfolio.
Look beyond the obvious trade
Prominent investors like Dalio often stress the importance of diversification — and for good reason. Many traditional assets tend to move in tandem, especially during periods of market stress.
That message feels especially relevant today. Nearly 40% of the S&P 500’s weight is concentrated in its ten largest stocks, and the index’s CAPE ratio hasn’t been this high since the dot-com boom.
This is where, for many investors, alternative assets come into play. These can include everything from real estate and precious metals to private equity and collectibles.
But there’s one store of value that routinely flies under the radar: It’s scarce by design, coveted worldwide and frequently locked away by institutions.
We’re talking about post-war and contemporary art — a category that has outpaced the S&P 500 with low correlation since 1995.
It’s easy to see why art pieces often fetch new highs at auctions: The supply of the best works of art is limited, and many of the most desirable pieces have already been snatched up by museums and collectors. That scarcity can also make art an attractive option for investors looking to diversify and preserve wealth during periods of high inflation.
Until recently, purchasing art has been a domain reserved for the ultra-wealthy — like in 2022 when a collection of art owned by the late Microsoft co-founder Paul Allen sold for $1.5 billion at Christie’s New York (2), making it the most valuable collection in auction history.
Now, Masterworks — a platform for investing in shares of blue-chip artwork by renowned artists, including Pablo Picasso, Jean-Michel Basquiat and Banksy — can help you get started with this asset class. It’s easy to use and, with 31 successful exits to date, Masterworks has distributed more than $65 million in total proceeds (including principal).
Simply browse their impressive portfolio of paintings and choose how many shares you’d like to buy. Masterworks then handles all the details, making high-end art investments both accessible and effortless.
New offerings have sold out in minutes, but you can skip their waitlist here.
Note that past performance is not indicative of future returns. Investing involves risk. See Reg A disclosures at http://masterworks.com/cd .
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