This Protects You From An AI Bubble, Pays 7.7% Dividends

Core Viewpoint - The current stock market is not in a bubble despite significant gains, particularly driven by AI advancements [2][4][10] Market Performance - Over the last six months, stocks have increased by 32.4%, equating to a 65% annualized return, which raises concerns about sustainability [4] - The average annual return for stocks over the past decade is 12.9%, slightly above the century-long average of 10.5% [4][6] - Historical context shows that the recent market performance follows two major selloffs due to the pandemic and recession fears, suggesting a recovery rather than a bubble [6] AI Impact - There is widespread interest in AI, with discussions permeating various sectors, including education, indicating its significance in the current market [7] - The CNN Fear and Greed Index shows a neutral reading, suggesting that fears of an AI bubble are not currently reflected in market behavior [8] - Studies indicate that AI is not displacing jobs but rather enhancing corporate profits, contributing to overall earnings growth [10][11] Investment Strategies - A two-step investment strategy is proposed to mitigate risks while capitalizing on potential gains, offering yields up to 8.2% [3] - The Nuveen S&P 500 Dynamic Overwrite Fund (SPXX) is highlighted for its 7.7% yield and exposure to large-cap AI companies [15] - The Liberty All-Star Growth Fund (ASG) is preferred for its 8.2% yield, strong long-term performance, and current trading at an 8.2% discount to NAV, providing additional upside potential [16][18]