Sebastian Raedler, head of European equity strategy at Bank of America, said investors should now hedge their exposure to stocks driven by artificial intelligence. He warned that every major investment boom over the past 200 years eventually ended in collapse. “This is an extremely risky game,” the strategist said in an interview with Bloomberg TV. Raedler said that many investors feel they have no choice but to participate in AI trading, but they need to be prepared to act quickly if there are signs of a reversal. “People are nervous.” Raedler urged investors to start laying out stocks that have suffered a severe setback but would benefit if the boom eventually proved unsustainable. The strategist also mentioned that his derivatives team colleagues proposed that options strategies can be used as a hedging tool for defensive sectors such as essential consumer goods.

Sebastian Raedler, head of European equity strategy at Bank of America, said investors should now hedge their exposure to stocks driven by artificial intelligence. He warned that every major investment boom over the past 200 years eventually ended in collapse. “This is an extremely risky game,” the strategist said in an interview with Bloomberg TV. Raedler said that many investors feel they have no choice but to participate in AI trading, but they need to be prepared to act quickly if there are signs of a reversal. “People are nervous.” Raedler urged investors to start laying out stocks that have suffered a severe setback but would benefit if the boom eventually proved unsustainable. The strategist also mentioned that his derivatives team colleagues proposed that options strategies can be used as a hedging tool for defensive sectors such as essential consumer goods.