He recently warned that the market is the most expensive in history during an interview with CNBC. The big story is the massive investment in artificial intelligence (AI), which is driving up AI stocks<\/a>. That’s similar to the overzealous investment in the internet at the turn of the century. And while SpaceX isn’t technically an AI stock, it is investing in AI, and CEO Elon Musk has pitched the idea of building AI data centers in space. Grantham sees the massive IPO as another sign of a potential top, noting that internet stock IPOs were similarly big news toward the end of the 1990s. <\/p>\n Grantham is probably right, but what should you do about it? <\/p>\n The interesting thing about bear-market predictions<\/a> is that they are wrong until they suddenly become correct. Bears can be wrong for a long time before quickly looking prescient, with Grantham admitting that the timing of the top he foresees is uncertain. So what is an investor to do? The quick answer is don’t panic and sell everything you own, becoming a de facto market timer. <\/p>\n History is very clear. If you bought an S&P 500 Index (SNPINDEX: ^GSPC) fund, like SPDR S&P 500 ETF (NYSEMKT: SPY) or Vanguard S&P 500 ETF (NYSEMKT: VOO), or even the Nasdaq Composite index and simply held tight through the Dot-com crash, you would have eventually seen your investment recover and then go on to new highs. Even the Great Recession wasn’t enough to stop the broader indexes from continuing their long-term upward climb. <\/p>\n Story Continues <\/p>\n That said, the AI bubble is a potential risk that you might want to address if you have material exposure to AI stocks. That, however, can be achieved by shifting some assets into historically resilient sectors such as consumer staples or utilities. Or, if you are worried about the market’s valuation, you can simply invest in a value-oriented ETF. <\/p>\n Grantham is an expert, but be careful how you react <\/p>\n You should consider expert opinions when making investment decisions. Grantham qualifies as an expert in investing. However, you shouldn’t blindly follow any advice. You need to make sure you invest in a way that makes sense to you and aligns with the market’s long-term history. A buy-and-hold approach has been a long-term winner for most investors. <\/p>\n You may want to make changes at the edges, like reducing AI exposure, but dumping your stocks in the hope of avoiding the downturn (and knowing the right time to buy back in) is likely to be a mistake. That’s market timing, which very few investors have managed to do profitably over the long term. <\/p>\n Should you buy stock in Space Exploration Technologies right now? <\/p>\n Before you buy stock in\u00a0Space Exploration Technologies, consider this: <\/p>\n The Motley Fool\u00a0Stock Advisor\u00a0analyst team just identified what they believe are the\u00a010 best stocks<\/a>\u00a0for investors to buy now\u2026 and\u00a0Space Exploration Technologies\u00a0wasn’t one of them.\u00a0The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. <\/p>\n Consider when\u00a0Netflix\u00a0made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $418,761!*\u00a0Or\u00a0when\u00a0Nvidia\u00a0made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $1,195,804!* <\/p>\n That performance is why people listen. With a track record of\u00a0beating the S&P 500 by 4x,\u00a0Stock Advisor\u00a0offers a distinct advantage. Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built for the long haul. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of July 3, 2026. <\/p>\n Reuben Gregg Brewer<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> Image source: Getty Images. <\/p>\n
<\/a> ^IXIC<\/a> data by YCharts<\/a> <\/p>\n