Market commentary

Today on Ausbiz with Juliette Saly, I explained that while low valuations in 2022 set the stage for strong returns, we’re now at the opposite end of the spectrum, with very high price-to-earning ratios (P/Es), elevated enthusiasm (especially around artificial intelligence) – and growing economic and geopolitical uncertainty, all of which point to lower returns and greater volatility in 2026. We’re also seeing signs of speculative excess in the AI thematic, from soaring private valuations to rising constraints around energy and water that are likely to create speed bumps for the sector.  continue…

by Roger Montgomery Posted in Market commentary, TV Appearances.

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On this episode of Over the Money Fence, I joined Nicola and Di to reflect on what really shaped markets in 2025, cutting through the noise around artificial intelligence (AI), technology stocks, gold, Bitcoin, inflation and interest rates. I shared my outlook for 2026, including the risks of an AI-led bubble, the growing role of alternative strategies like private credit, and why diversification and quality investing remain essential. We also tackled the most common listener questions and discussed simple, practical steps to help people head into the new year feeling clear, calm and confident. continue…

by Roger Montgomery Posted in Global markets, Investing Education, Market commentary, Podcast Channel.

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Would you ask a barber whether you need a haircut?

Amid the negative sensationalist media headlines – what Macquarie Chief Economist, Ric Deverell, dubs “click bait”– it’s crucial for investors to filter out the noise and focus on underlying economic and business fundamentals. Speaking on December 4, 2025, at an investor briefing for Macquarie clients, Deverell offered a clear, cautiously optimistic view for 2026, suggesting global growth might very well surprise to the upside, driving a positive outlook for risk assets. continue…

by Roger Montgomery Posted in Market commentary.

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From South Sea to AI: Artificial Intelligence (AI) companies seem to be asking investors the question: Just how long can growth be built on the question of future returns – and a productivity revolution – that are by no means guaranteed?

The South Sea Bubble of 1720 remains the archetype of a financial mania driven by exotic new ‘tech’, the promise of monopoly returns, and limitless public imagination.

At first, the idea of comparing the South Sea bubble to an AI boom 305 years later seemed far-fetched. AI is not, for example, a Ponzi scheme being promoted by those who fail or refuse to publish financials or forecasts of how profits will be made. continue…

by Roger Montgomery Posted in Investing Education, Market commentary, Technology & Telecommunications.

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Sir Isaac Newton is enshrined in history as the saint of rational thought. He decoded the laws of gravity, invented calculus, and parsed the rainbow. Yet, in the spring and summer of 1720, the arguably most intelligent man in the British Empire made a series of financial blunders, recorded for posterity, and so catastrophic they have become a cautionary legend in economic and investment history.

Newton’s entanglement with the South Sea Company serves as a stark reminder: in the face of collective delusion and market mania, even a genius can be led astray. continue…

by Roger Montgomery Posted in Investing Education, Market commentary, Technology & Telecommunications.

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Recently, the BBC interviewed Sundar Pichai, the CEO of Alphabet, Google’s parent. With all the claims the artificial intelligence (AI) boom is a bubble – something I have noted cannot be known until after the event – I wonder whether the BBC was motivated to go to the source. 

Describing the surge in AI funding as a remarkable period, yet one marked by certain unrealistic expectations, Pichai warned viewers of BBC News that no business would escape unscathed if the AI boom collapses. continue…

by Roger Montgomery Posted in Global markets, Market commentary, Technology & Telecommunications.

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The U.S. Federal Reserve (The Fed) has two main mandates: supporting employment and controlling inflation. Until Friday, it looked as if the two were almost perfectly balanced against each other, suggesting that the Fed would keep rates on hold in December.

Last week, Wall Street decided that a December cut was off the table. On Wednesday, the Chicago Mercantile Exchange (CME) Fedwatch futures index placed the probability of a cut at just 30 per cent.

Meanwhile, JPMorgan published a note predicting a January cut. Markets sold off dramatically, with the Nasdaq 2.74 per cent lower, and the S&P 500 losing 1.95 per cent last week. And there were of course, fears of a bubble in the artificial intelligence (AI) theme, which we have written about here copiously. continue…

by Roger Montgomery Posted in Economics, Global markets, Market commentary.

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The father of a field of mathematics known as fractal geometry, Benoit Mandelbrot, in his fantastic book, The (Mis)behaviour of Markets, observed that market price movements, unlike the smooth curves assumed in traditional financial models, are jagged and irregular, meaning that large price swings are more frequent than expected, and periods of high volatility can be followed by more high volatility. His work provides a more realistic framework for understanding and modeling risk, noting also that volatility in markets tends to cluster.

In my experience, I’ve observed those volatility clusters often mark turning points in markets. To be clear, not all periods of heightened volatility are turning points, but almost all turning points are accompanied by greater volatility. continue…

by Roger Montgomery Posted in Economics, Market commentary, Market Valuation.

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U.S. Senator from Vermont, Bernie Sanders, and Professor Geoffrey Hinton – considered the ‘Godfather of AI’ – pointed out last week at Georgetown University that artificial intelligence (AI) and robotics aren’t inherently bad, but the people pushing this technology revolution are the richest people in the world. They suggest that Musk and Bezos, for example, aren’t staying up at night worrying about ordinary people. They aren’t worrying about working people. They’re not spending hundreds of billions of dollars to extend life expectancy, address global warming, shorten the workweek, and guarantee high-quality health care. They simply want more wealth and more power. continue…

by Roger Montgomery Posted in Market commentary, Technology & Telecommunications.

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I joined Angus Randall and Julia Bergin from ABC The world to discuss why, despite artificial intelligence’s (AI’s) enormous long-term promise, early investors often face the highest risks. History shows that major technology advancements usually go through a boom–bust cycle, which is why caution – not blind optimism – is essential right now.

Catch the segment here: Calls to boost Australian investment in AI. continue…

by Roger Montgomery Posted in Market commentary, Radio, Technology & Telecommunications.

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