Exciting Times Ahead for Stock Investors
After the summer holidays, it’s a good time to revisit the basics of stock investing and to wake up and exercise our mental faculties in preparation for the stock market activity in the fall and winter. Historically, summer and early autumn have often been quieter periods in the stock markets, with activity picking up again in the autumn (often starting in October). There’s an old stock market saying: “Sell in May and go away,” to which one might add: “…but don’t forget to come back in September.”
So why should one invest in publicly traded stocks at all? Stocks are liquid and don’t involve the large ancillary costs associated with other investments, such as real estate. They also allow participation in global economic growth—you are no longer solely dependent on developments in your local area.
But is it wise to invest right now, when global stock markets have already surged dramatically? Absolutely—it’s always possible to find interesting investment opportunities, and we have historically strong drivers for long-term performance. We live in an era of digitalization, and we are now moving into the next phase: the increasing use of artificial intelligence (AI). This is likely to be the strongest global driver over the next ten years. Technology companies such as Nvidia, Microsoft, and similar firms are set to benefit the most from AI. Energy companies are also crucial because widespread AI adoption isn’t possible without sufficient energy supply.
AI will also accelerate and reduce the cost of drug development. In the future, AI could even replace animal testing. Overall, corporate productivity is set to make a tremendous leap forward.
AI will be followed by the era of quantum computing. In recent years, there have been promising advances in quantum computing, although its commercialization will still take time.
The green transition, the hydrogen economy, and the electrification of industry and transportation are also transformative trends that are unlikely to have alternatives. Progress is already well underway, even if it won’t be entirely linear.
A significant change has taken place in Germany: the new government has removed barriers to additional borrowing and launched a program worth hundreds of billions of euros, particularly aimed at developing infrastructure and the defense industry.
None of these trends will proceed in a straight line, but market fluctuations create excellent buying opportunities for stock investors.
Exciting decades ahead in stock investing!
The original Finnish column text is available in the digital version of Salonjokilaakso, on page 11.
