Swerve Away from Short-Term Hype: Spot Long-Term Growth Instead

Following the artificial intelligence (AI) hype may be irresistibly tempting in the stock market, but it is most certainly not the right way to go about. Instead, cultivate the talent to discern the potential of long-term growth in AI companies to ensure your investments are made wisely.

The Present Short-Term Hype

Look around, and you will easily notice AI technologies often being portrayed as incredible systems that can not only rapidly disrupt industries, but also successfully tackle existing issues expeditiously. This quickly causes a substantial increase of investments in AI companies as many mistakenly believe that game-changing breakthroughs are promised together with high returns.

Takeaways from the Internet Revolution

In fact, this AI revolution parallels the prior Internet revolution that we had experienced about 2 decades ago. Likewise, the Internet revolution navigated through doubt followed by extreme short-term hype, before the public began to recognise its long-term worth. Such patterns are evident in the current AI revolution and it is important for us to start recognising them. They can effectively aid in neutralising the present hype for it to translate into greater appreciation for future AI developments.

Venture Beyond the Hype

Short-term overhype can inflate valuations to unsustainable levels, leading to times where market correction becomes inevitable. This undeniably sheds light on overpaying risks during short-term hype. Especially in the event that the companies perform poorly and yield unsatisfactory results, you may be subjected to low returns or even worse results.

Employ intelligent approaches to recognise the valuation of the stocks so you can make the right investments for long-term wins. I emphasise on conducting thorough research of companies’ historical revenue growth, profitability, along with their positions in the market. Such long-term fundamentals can be crucial hints to ensuring your investments are able to endure possible market volatility and produce sustained returns nonetheless.

Disclaimer:‍‍‍‍‍‍ Investment carries certain risks. You should not just rely on results as an indication of your financial needs. You should understand and familiarise yourself with any investment and the associated risks before investing. You are also recommended to seek professional advice before making any decision to buy, sell or hold any investment or insurance product. The views and thoughts expressed in the post belong solely to us, and not to Manulife Financial Advisers Pte Ltd, or any other group of individuals.