Topic: How To Invest

What is Pat’s commentary for the week of May 14, 2019

Article Excerpt

It’s natural to think you profit best from technology by investing in shares of tech leaders. But this can lead to disappointments. Tech stocks are highly volatile. Some early leaders flame out. Others go through long setbacks due to industry downturns, corporate restructuring, regulatory issues and so on. Journalists and economists make the same mistake as investors. They take too short a view, or expect steady gains, or disregard political constraints. Every variation in growth makes them ask, “What happened to the productivity dividend we were supposed to see from new technology?” People generally fail to recognize the large random element in the speed and payoff of technological progress. It’s totally unlike, say, a steady paycheque, or the interest you get from a savings account. It’s more like the growth of a healthy child. It also resembles the stream of dividends and capital gains that you get from owning a portfolio of high-quality stocks from all five major economic sectors—the kind of…