36% of Your Portfolio Just Disappeared In the Last 30 Years (Andrew Ang Explains How)

Andrew Ang argues AI could raise average capabilities and expand the right-hand tail of performance, but he cautions that replacing tasks without redesigning workflows may not deliver major productivity gains. He expects senior investment leaders and entering analysts to remain while some middle roles adapt, consolidate, or shift to other work.

Ang says AI agents could specialize across asset classes and work in parallel to produce expected returns with plain-English explanations, but whether they outperform human-based approaches remains unproven until live performance is assessed. He also calls for guardrails: agent changes and their rationales should be recorded for review during portfolio rebalancing.

Ang estimates taxes reduced a taxable U.S. equity investor’s portfolio by 30–36% over the past 30 years, or roughly 160–170 basis points annually, even though that period had lower federal tax drag than the 1926–2025 average of about 350 basis points. He says dividends drove much of the historical burden but are now a smaller share of the market and receive preferential treatment, while dividends and interest taxed as received interrupt compounding.

Ang argues investors should compare income-oriented products on after-tax returns: he says private credit yielding 10% is roughly equivalent to 7% in equity terms, and would need to yield about 14–15% to match a 10% equity return. He also says investors may be better off selling appreciated stock themselves than receiving taxable yield from income-enhanced products.