The traditional notion of investing in “safe stocks”—companies like Nike, Starbucks, Adobe, Target, Intel, Boeing, UnitedHealthcare, Disney, and AT&T—has become outdated.
In today’s era defined by relentless innovation and the transformative power of Artificial Intelligence, even these established giants face unprecedented challenges that undermine their stability.
Let’s look at some recent performance: Nike experienced a 12% revenue drop in 2025, grappling with tariffs, shifting consumer trends, and softening demand in China. Adobe faces investor skepticism as generative AI returns haven’t materialized as quickly as anticipated.
Target, despite a post-pandemic bounce, struggles with weak foot traffic, inventory issues, and intense online competition. Boeing continues to battle certification delays and profit pressures, while UnitedHealthcare missed earnings guidance amidst rising costs and leadership changes.
Even Disney sees slowing streaming growth and subscriber losses as they lose viewers to Netflix and YouTube.
Starbucks, too, has faced challenges with slowing sales growth and increased competition in the beverage market, impacting its once-dominant market position.
These are just a handful of stories highlighting the need for rapid adaptation in a digital and AI-driven landscape.
The Index Fund Trap
These companies are often staples in passive investment vehicles like S&P 500 index funds and ETFs. This means that investors in widely held funds such as the Vanguard S&P 500 ETF (VOO) or Schwab S&P 500 Index Fund automatically gain exposure to these risks, regardless of their individual investment goals.
What most investors don’t realize is that passive investing doesn’t insulate portfolios from disruption; rather, it can embed them within it.
Today’s new market reality demands a shift from passive acceptance of risk to active management. The definition of “safe” has evolved: it’s no longer about avoiding risk entirely, but about understanding and strategically navigating it.
Success now hinges on a company’s agility, its commitment to innovation, and its ability to either leverage or withstand the disruptive forces of AI.
This also raises a question for those relying on financial advisors for their retirement portfolios: Is your advisor exposing you to significant disruption risk by heavily relying on passive index funds that hold these very companies?
In a rapidly evolving market, a “set it and forget it” approach to passive investing, without management, may no longer be enough to safeguard your long-term wealth.
What This Means for Your Portfolio
So, what does this mean for you? It means that relying on past performance or brand recognition for your investment decisions can be risky. It means that for your retirement planning, a static portfolio might not be enough.
Investors should be asking tough questions: Is a company genuinely innovating, or merely playing catch-up? How robust is its business model against technological disruption? Is it harnessing AI to its advantage, or is it vulnerable to its transformative power?
The market now rewards foresight and agility, and penalizes complacency.
As registered investment advisors and fiduciaries, our focus is on this evolving perspective, recognizing it as a necessity in today’s fast-changing market. The safe stocks of yesterday may not be the safe bets of tomorrow.
A comprehensive wealth management strategy today involves a deeper dive into a company’s adaptability, its investment in future technologies, and its ability to withstand unforeseen market shifts. Custom portfolio management, tailored to your specific goals and timeline, becomes even more important.
Ready to move beyond the standard advisor playbook?
At Paraiba Wealth, our focus is on building actively managed portfolios—a strategy designed for greater control, tax efficiency, and tailored to you. If you’re ready to see what this looks like, book a no-obligation initial call today.