Old economy stocks

As detailed here in recent Money Matters articles, the artificial intelligence stocks, called AI, seemed to go up and up for months in 2025, only to hit a wall in 2026. Not specifically tied to the years mentioned, however, as weakness in AI stocks started to raise its ugly head on and off in the fall of 2025. That said, a correction was to be expected, as stock charts that look like rocket launches historically tend to hit a ceiling at some point. Prices can't keep going up forever. It is said high prices cure high prices. As stocks get more expensive, fewer and fewer buyers may not be willing to pay the higher prices. Investors, also seeing stellar gains in one sector, might start to get nervous, take some gains and look to other areas to explore with their money. Market movement, sometimes called "rotation," then takes hold as money is moved from one trade to another. When these high-flying trades reach the point of exhaustion, money sometimes moves into more conservative areas. These sectors might consist of iconic food companies, auto companies, construction companies, consumer staples, real estate trusts, energy and other sectors typically regarded as the backbone of an economy. That's not to say hot sectors like the AI trade are done for. It remains to be seen whether the correction is permanent or just a temporary sell-off, as it can be hard for some investors to move money away from trades that have yielded juicy returns in the past. Hope remains supreme in many cases. It's always possible a stock that has gone up many multiples and then backed off might return to see its previous high and then keep going. No one really knows until it happens. Playing that game, however, can be hazardous to one's investing health. Investors, amateurs and professionals alike tend to get married to a sector or particular stock and keep returning to the proverbial well to try and milk more profits from what before seemed like easy money. Moving to a new sector also requires additional research, which is always a chore. Having familiarized oneself with a particular sector or stock and its movements, it may be hard to undertake these new endeavors like looking into a new sector. Harkening back to the stocks your dad or even your grandfather may have bought, the old economy stocks are the iconic companies that have survived forever and a day. Coca-Cola, Caterpillar, Costco, Chevron and McDonald's are some of the household names that easily come to mind. There are many more. Not a recommendation to buy or sell any of these stocks mind you, but the above-mentioned stocks might fall into the Old Economy stocks I refer to. One could do worse by adding some of these stocks to a portfolio. My opinion, of course, and often when investors get nervous, they run to these old stalwart stocks. If volatile stock movements are causing you angst and you want to move away from some of the high flyers and sleep better at night, these household names that have been around for decades, have huge balance sheets and might not move as much as the overall markets, might be an option. When I start feeling behind the markets and seeing more red than I'm used to, I consider moving into more CDs, high-yield savings accounts, high-quality bonds and U.S treasuries, and perhaps adding some of these household names and just sit it out for a while. Your financial professional can always assist you in guiding you to calmer waters if you're feeling a bit queasy in the current markets. This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a BA in Economics with honors, 1979, and California Insurance License #0L34249. His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com.