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Wise Money: Betting on Innovation Thumbnail

Wise Money: Betting on Innovation

Quote to Ponder

"In the short run, the market is a voting machine but in the long run, it is a weighing machine.”

- Benjamin Graham

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Insight

In recent weeks, we’ve received a number of client questions about current events, including concerns that tariffs and political decisions may lead to economic disruption.

It’s natural to feel uneasy. Especially when faced with so many headlines forecasting economic turmoil.

However, it’s important to embrace a long-term view and remember that market fluctuations are an inherent part of the economic landscape. While the prospect of short-term losses can be daunting, history has shown that markets tend to recover and grow over time. Stock markets deliver higher returns precisely because they involve a level of uncertainty and risk. If stock returns were guaranteed, like a savings account, they would offer much lower yields.

It’s definitely easier to focus on the “long-term” during times when the market is going up. It’s much more difficult when you’re looking at news headlines of all the things that might go wrong. Short-term concerns start to weigh heavier in our minds.

In times like these, it’s good to think not just about the last few weeks, but how far innovation in the world economy has come over the last 20 years. And then think about where it might go in the next 20 years!

Here’s just a few of the great economic events in the last 20 years:

  • iPhone and the Smartphone Revolution (2007): Transformed daily life for over 6.8 billion users, driving trillion-dollar industries like e-commerce, mobile banking, and social media.
  • CRISPR Gene Editing (2012): Enabled faster, cheaper DNA editing, opening doors to genetic cures and making gene therapy more accessible.
  • mRNA Vaccine Technology (2020): Cut vaccine development time from years to months, saving millions of lives and revolutionizing pandemic responses.
  • Artificial Intelligence Advances (2010s): Boosted productivity, improved healthcare diagnostics by up to 30%, and drives key innovations like automation and financial forecasting.
  • Renewable Energy Innovations (2010s-2020s): Solar costs fell 82% and battery prices 89%, making clean energy more affordable and accelerating global CO2 reduction efforts.

The technology we have today is in many ways unimaginable compared to what we had 20 years ago. Over the next 20 years even bigger improvements are on the horizon:

  • Fusion Energy: Net energy gain achieved in 2022; companies like ITER and CFS aim for commercial fusion within 20 years.
  • AI-Powered Innovation: AI to revolutionize industries, from diagnostics and personalized medicine to manufacturing, logistics, and finance, driving major efficiency gains and automation.
  • Quantum Computing: IBM and Google breakthroughs could revolutionize drug discovery, finance, and logistics by 2030.
  • Gene Therapy & Longevity: CRISPR therapies nearing FDA approval, with startups targeting age-reversing treatments by 2040.
  • Next-Gen Batteries: Solid-state batteries doubling EV range and supporting renewable grids could hit the market by 2030.

Thinking just about the next few weeks or years can feel uncertain with many risks. But it’s also a risk to think about the possibility of not being invested in a world 20 years from this moment. A world full of clean energy, AI assistance, and drastically improved robotics.

The real risk isn’t short-term market fluctuations. It’s standing on the sidelines as these transformative changes happen!