Will the Quantum Computer Leave Us All in the Dust?

With Artificial Intelligence, it anticipates my desires before I even say, “Hey, Quanty!” It will analyze enormous datasets in the blink of an eye, produce highly precise market forecasts, and manage portfolios almost single-handedly. When it arrives, that is – the quantum computer. A PC with gigantic computing power, surpassing anything we’ve ever seen.

That’s the kind of expectation being voiced on social media about this supercomputer. I’ll admit: I had to look up what a quantum computer actually is. Honestly, I wasn’t much wiser after my research – but hey, it sounds impressive.

Technology Meets the Realities of the Markets

As you can tell, I’m skeptical. Not because I doubt technological progress – quite the opposite. It will happen, of that I’m sure. My skepticism is more about the financial markets. Because they will remain unpredictable, of that I’m equally certain.

Every technological leap brings advantages – initially, often only for a select few. Hedge funds with massive budgets gain an edge and siphon money from other market participants. Until the others catch up and level the playing field. The market remains a constantly evolving and transforming entity.

When I look to the future, I see, above all, larger and faster price movements on the stock exchange. Computers are extremely rational market participants, that’s a given. And all those saving-plan investors (is that a proper term?) will continue to invest calmly and consistently each month into their passive index ETFs (with Exchange Traded Funds, you can invest in an index simply and cheaply – you just have to choose one, actively!)

Stay the Course, No Matter What

Or will investors lose their nerve when markets take a significant downturn? We’ll see. Somehow, it seems no one believes in bear markets anymore – or remembers what it feels like to face a grizzly one. I do!

That’s why at Gutmann, we ensure that our investment strategy is geared to handle all the market’s ups and downs. And this works best when you know every single investment well and focus on quality. But you already knew that.