Losing 615 billion in market value in a single day is a bad day. Imagine the MANY HUNDREDS OF YEARS of work that went into making all of those other fabulously successful household names. Now imagine them all vanishing at the opening bell.

So what happened to NVIDIA? Well, it’s a computer chip maker that has had recent astronomical success due to making the leading chips for cutting edge technologies like AI and crypto. Lately it seemed like every major tech company who wanted to compete in these spaces would be forced to spend massive amounts of money with NVIDIA for the foreseeable future.

But just today news of a new AI company in China dropped called DeepSeek. Experts are saying it may perform even better than ChatGPT and was reported to be developed with only $6 million (Over 100,000 TIMES LESS than the $1 trillion that went into Open AI). This big technological leap is putting into question the stranglehold NVIDIA has on the AI market going forward, hence the massive drop in value today.

What does this mean for you? Well for all of you who have been asking “Should I invest in NVIDIA?” over the last year, I’ll tell you again what I’ve been saying all along: No. I don’t speculate on individual stocks and THIS IS EXACTLY WHY. Everyone rushing to NVIDIA the last year has been CHASING PAST PERFORMANCE. As of yesterday, NVDIA has gone up over 28,000% over the last 10 years. That leads performance chasers to rush in thinking “this is the best stock!” WRONG. It was the best stock 10 years ago when NO ONE WAS TALKING ABOUT IT. Now it’s too late. Your missed it. It’s not going up 28,000% over the next 10 years I can promise you that.

So what do you do? Well I owned NVIDIA back in 2010. How did I know? I didn’t. I bought ALL the stocks in an index fund. And I own the NVIDIA of tomorrow that no one is talking about today in my index fund as well.

Let this be a lesson that you don’t know the future and you won’t beat the market by chasing past performance.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy

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By: Gabriela Gonzalez
Title: NVIDIA’s crash shows why I stick to index funds
Sourced From: www.personalfinanceclub.com/nvidias-crash-shows-why-i-stick-to-index-funds/
Published Date: Wed, 29 Jan 2025 02:29:04 +0000

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