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SELL SELL SELL!
The welcome page on my browser showed me a Yahoo article, with a classic click-bait title: “7 Stocks to Dump Before the AI Bubble Bursts.”
It does three things at once: tells you to sell, tells you to time the market, and bakes in the assumption that we’re definitely in a bubble. That’s a lot from a single headline.
Do we really know if it’s a bubble?
People LOVE to debate what is going on in the market and whether we are in an AI bubble of not. Some analysts argue the AI run-up looks bubbly (code for “the market is overvalued”); others note real profit growth for the big companies driving the growth and productivity gains that could justify higher prices over time (code for things will keep going up).
The truth is neither you nor I, nor the media (nor any model) can know in advance what is going to happen next. That uncertainty about what the future holds is exactly why market timing is so dangerous.
The media hype trap
Headlines are incentive machines. Drama gets clicks. If it bleeds it leads! The media is going to write articles, create content and do whatever it can to get your attention. That is how they make their money!
We don’t monetise our blog so my only purpose of writing this article is to get you to ignore the media and focus on your simple investing plan!
If you act on the headlines that tell you to sell or dump the AI stock then what are you going to do with your cash? You are going to have to sell now, buy back in again later later which means you you need to be right twice.
Miss just a few big up days and your long‑term returns suffer. J.P. Morgan’s research shows that the best days often cluster near the worst days; over the last 20 years, six of the ten best days arrived within two weeks of the ten worst days. In other words, if you panic‑sell after a big drop, you’re likely to miss the rebound.
In the Rebel Finance School Facebook group we see posts asking if people should sell out before the AI Bubble bursts and they invariably attach a media article that is behind their thought to sell. This is the proof that they should get out now.
The media is largely responsible for people’s fear. If they weren’t screaming headlines at people we would probably be living our lives happily, miss the crash entirely and end up wealthier over the long term!
Why Timing the Market Fails – Visual Proof
This section comes straight from Rebel Finance School 2024, where we introduced a brand-new section to tackle one of the biggest investing myths: “I’ll just sell high and buy low.” Katie had a blast creating these charts to show you why that strategy almost always backfires.
The visuals below reveal the hard data behind market timing mistakes, how fear and greed lead investors astray, why missing just a few of the best days can crush your returns, and why staying invested beats guessing every time.
The fear, right now is that we are in an AI bubble, the market is overvalued and can’t continue to go up. It has been the same fear since we started investing in 2014 with people saying that the market is too high, now isn’t a good time to buy, stay away from the stock market, it’s overvalued. The reason AI, has changed but the same fear is still prevalent.
Then people start telling us that not only is the market high but it is at an all time high!
Why would you buy a global index fund when the market is at an all time high? Shouldn’t I wait for it to go down again?
Katie’s response is always the same, “of course it is at an all time high!” if the market goes up over time then it will constantly hit all time highs.
That is the nature of the stock market, it is always moving up and to the right.
So how often is the stock market at an all time high? 354 months out of 1176 months from January 1926 to February 2024.
About 30% of the time the stock market is at all time high. Why are we constantly surprised and fearful of it?
This chart shows the Vanguard FTSE Developed World from 2009 when it was launched to 2025.
The yellow parts of the chart show the times the fund was at an all time high. There is a lot of yellow!
A plant reaching a new height doesn’t mean that it has finished growing. It means that it is healthy.
The stock market keeps on going up because of economic growth, inflation, innovation and technology, long term-value creation, population growth and participation and compounding returns
Yeah but I am smart, I read a lot, I stay up to date. Can’t I buy low and sell high?
That is the dream, if you could do that you would be the richest person on the planet. Problem is no one has consistently been able to do it. No one knows when the low or high is!
This chart shows how close the biggest days of loss and growth are to each other. Most of them happen within 2 weeks of each other. So if you did manage to sell right at the top you would probably miss the strongest rally days right afterwards. Timing the market is a fools game.
So what if I miss out on the ups, at least I missed the downs!
Let’s look at the data to see how bad missing out on the best days is!
This graph compares missing just those few days of big growth verses investing the whole way along and not trying to time the market.
Missing the biggest up days turns your £10k into £34k. Not bad?
But if you had just ridden it out you would have ended up with £73k.
I know which one I would prefer to have!
This notion that you can just jump off the roller coaster ride of the stock market is such a persuasive one.
I will just duck out as soon as it starts to go down, then buy back in at the bottom and ride it back to the top.
Sounds amazing doesn’t it?
Good luck with that. No one knows when the high is or the low is and if you did jump out when the market wobbled in April 2025 you would have missed a monumental rally.
Timing the market, pulling out when you are afraid is going to leave you hurt and bleeding money.
What inevitably happens is that people leave after the down, because it happens so quickly they don’t get out in time.
Then they stay out thinking it will go down even more only to miss the rally on the way back up. Thus missing out at both ends!
Time in the market is more important than timing the market.
This is the expression we live and die by whilst investing.
It means that the most important thing you can do is get your money into the market as soon as possible and then NEVER interrupt the compounding…
because over the long run the market always goes up.
So just invest your money, ignore the media and leave it to grow over the years.
Behavioural finance: why our brains hate staying invested
When markets are loud, the media is screaming sell, our wiring misfires:
- Loss aversion: Some studies show losses hurt 6x more than gains feel good, so we sell to stop the pain, often at the worst time.
- Recency bias: We project yesterday’s drop into tomorrow. We only remember recent history. We just had a 20% drop in April and people still remember how bad it felt!
- Availability bias: Scary headlines feel like truth because they’re vivid and everywhere. Just because everyone is saying it doesn’t mean it is true. In fact most of the time if everyone is saying it you are safer doing the opposite!
- Herding & FOMO: Everyone’s selling/buying, so I should too.
- Overconfidence: I’ll get out, then get back in at the bottom. Spoiler: most don’t.
The antidote is process over prediction: pre‑commit to a set of rules, automate contributions, and pre‑schedule reviews instead of reacting to headlines.
Your success in investing is directly corelated to how good you are at ignoring your own brains natural wiring.
The Donegan mantra
Ignore the noise. Stick to the plan.
Your Investor Policy Statement (IPS) is the plan. Pull it up and ask: “Does my IPS say “sell when I panic because a bubble might be forming?” If not, follow your own rules.
If you don’t have an IPS, create one now, We did a workshop with the fabulous Bob Haines and created a little tool to help you write your own one. Create your Investor Policy Statement
Quick checklist
- ✅ Stay invested—no guessing tops or bottoms
- ✅ Automate investing and get your money invested as soon as you earn it
- ✅ Keep costs low, diversify globally, we love global index funds
- ✅ Re‑read your IPS when headlines scream
No one can predict the future
Even if AI stocks correct, the biggest risk to most investors isn’t “the bubble” it’s their behaviour.
Katie and I have no idea if this is a bubble or a new industrial revolution. We won’t be trying to predict. We will be leaving our money invested in our index funds and riding out any wobbles.
Stay safe out there, ignore the media and focus on living a happy life
Peace and Pineapples
Alan and Katie
PS:
Here’s the whole series of articles for you:
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As with much in the field of personal finance this seems counterintuitive but current research does indeed suggest that lump sum (LS) investing is best done rather trying to time the market with a cost-averaging (CA) approach.
A recent paper by Vanguard showing a comparison of CA and LS methods across regions shows that LS has outperformed on average, suggesting you are usually better off investing immediately instead of holding back a portion of the potential investment. Across global markets, including the US, the UK, Australia, Canada and the European Union they saw similar results with an LS approach outperforming a CA approach 68% of the time.
Source: https://investor.vanguard.com/investor-resources-education/news/lump-sum-investing-versus-cost-averaging-which-is-better
Martin, THANK YOU for the wonderful post and for sharing that research. I am going to go and read that. LOVE that you shared that so well. Maybe we should write an article together about that one! Thank you. Alan
Many thanks Alan and Katie for your articles. Now that I have been more than 3 years consuming your content, I do feel that I have learnt lots and I do feel empowered when talking about finances and investing. As a veggie and grower, I loved the analogy of the plant ❤️.
Feliz Navidad and wish you the best for this 2026.
Sending you positive energy, peace and love.
Ori what a lovely message. Feliz Navidad a ti tambien! We love vegetables! And I am so glad the content is coming together. I think it does take time to sink in but after a while it just becomes second nature! Thanks for writing. Alan