Investing in Artificial Intelligence (AI) Stocks Can Be Risky, but This Might Be a Great Way to Do It

Investors can earn a reliable, practically risk-free annual return of up to 5% by purchasing U.S. government bonds, or they can invest in the S&P 500 (SNPINDEX: ^GSPC) index, which has delivered a compound annual return of 10.5% since its inception in 1957. But volatility is the price we pay for higher returns in the stock market, so investors will have to stomach regular sell-offs along the way, which sometimes exceed 20%.Those risks are substantially higher when investing in hyper-growth areas like artificial intelligence (AI). AI software powerhouse Palantir Technologies (NASDAQ: PLTR) offers a great example -- its stock has surged by a whopping 480% over the past 12 months, but it suffered a nerve-racking plunge of 40% between February and April this year, which would have spooked even the most seasoned investors.Buying an exchange-traded fund (ETF) can be a great way to invest in a basket of high-growth AI stocks, while smoothing out some of that extreme volatility. The iShares Future AI and Technology ETF (NYSEMKT: ARTY) holds 48 different AI stocks, including many of the industry's leaders, so it can insulate investors from sharp losses if one or two names underperform. Read on to learn more. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool