My AI Said My Portfolio Was “Extremely Dangerous” — Here’s the Recovery Plan

Welcome back to the AI Investment Diary. If you’re new, you might want to start with my first post.

Have you ever looked at your investment portfolio and thought, “Am I *really* sure about this?”

I considered my strategy to be aggressive and forward-thinking. But when I ran my first AI portfolio analysis, the feedback was shocking: “This portfolio is in an extremely dangerous state.”

Today, I want to share the story of why my portfolio was so risky, and how I’m using AI as a partner to build a new, more rational portfolio recovery plan from the ground up.

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The “Dangerous” Portfolio Built on Intuition

Seeing is believing. Here’s a look at the portfolio composition that my AI flagged as a problem.

In simple terms, my strategy was like a soccer team with almost no defense (Core Assets), too much focus on one star player (Emerging Markets), and 40% of the team sitting on the bench (Cash). A single market downturn in one specific region could have devastated my entire portfolio. This is why a portfolio recovery plan was urgently needed.

My “Aha!” Moment: Modern Portfolio Theory

The key to understanding this risk came from a concept my AI introduced me to: Modern Portfolio Theory (MPT).

It’s a Nobel Prize-winning idea that, in very simple terms, proves you can efficiently reduce risk without sacrificing much return by combining assets that don’t move in the same direction. It’s the mathematical proof behind the old saying, “Don’t put all your eggs in one basket.”

My portfolio was doing the exact opposite. I was taking on massive, avoidable risks, which made creating a portfolio recovery plan my top priority. It was a sobering realization.

The New Portfolio Recovery Plan: A “Core-Satellite” Strategy

Using this theory as a foundation, my AI and I drafted a blueprint for a completely new portfolio. Here’s what the plan looks like:

The key change is dedicating 60% of the assets to a “Core” that is broadly diversified across the global market. This builds a strong defensive foundation. The cash on the sidelines is put to work, and the remaining 30% forms the “Satellite,” where I can make strategic bets on growth areas.

Of course, this is still the blueprint. I’ve received this rational proposal from my AI, and now it’s my job to carefully study this portfolio recovery plan and, watching the market, begin to implement it step by step.

Conclusion: AI as a Co-Pilot for a Better Future

The biggest lesson for me in this process was the power of gaining clarity. With the help of AI, I was able to make a decision I felt truly confident in and understood completely. This portfolio recovery plan feels right.

I don’t see AI as a replacement for human judgment or something that’s “smarter” than us. I see it as the ultimate “co-pilot.” It helps us humans—who are often driven by emotion and bias—make better, more rational decisions.

By thinking, learning, and acting alongside AI, I believe we can create a future with more conviction and clarity. My journey to rebuild my portfolio has only just begun, and I hope this story provides some inspiration for you to think about your own relationship with AI.