We live in a world where everything is instant and urgent. A few decades ago you waited weeks for a letter to arrive with news about something and was happy to receive a call from someone only once you got home. For those of us who grew up in that slower world, waiting for your investments to germinate and bear fruit is easier than it is for someone who only knows about instant gratification. The problem is that with information travelling at close to the speed of light, investments react instantly, causing the investor who pay attention to become either very excited, or very sad, multiple times a day.
If we allow ourselves to stand back and ignore the second-by-second bombardment of information, we will begin to notice that markets also move in longer-term cycles. You must have had the experience of going on a two-week holiday to a place with no internet reception and when you get back to the office you look at your investment portfolio and see that nothing has changed, just to hear from you colleague that the markets had been a madhouse of ups and downs during that period.
The tricky bit when it comes to investing is not about getting the shorter-term moves right, but to invest in the trends with future potential. Someone who decides to shut out the noise completely, will unfortunately also not be able to see the trends. A good investor is the one who can filter out the noise and notice the trends. Such an investor will have to be patient because the noise will cause the chosen investment to have wild swings over the shorter term, but over time the volatility will smooth out and the trendline will go from bottom left to top right.
Currently we are in the AI trend. Everything and everyone are frantically participating in this phenomenon, not knowing what the end result will be and not knowing who will win and who will lose, but participation is crucial. As we see in the graph, this trend can still carry on for a while and if you are able to observe and separate the noise from the potential, you will reap the rewards.
