In the age of computers, stocks are no longer a safe bet

I created another article on the medium platform where I argue why investing in stocks is no longer a safe bet for the long term.

Some notes on my article

I am currently in the process of trying out different platforms, publishing content just to reach new masses of people, but this blog will be my main source. I think that with my smaller articles I’ll be able to reach out to more people and at least to plant a small seed about the financial independence. I haven’t found all the answers and I’m still learning from others and from my own experiences.

HFT trading is just at the starting point

Having that said, I’ll add some comments on my article. Because I targetted the big majority of the population I didn’t go into detail, but I had to add some numbers and some terminology.

The fact is that there are multiple high-frequency trading bots competing at the same time, so a human will never even be capable of competing against that army. Imagine having just 20 robots, that means over 1000 transactions per seconds… so every second you’ll have a transaction.

While some may argue that they add volatility to the markets, that doesn’t actually mean that’s providing any help for the rest of the investors.

HFT is getting smarter

There are different strategies for HFT, initially, those robots were pretty dumb, buying at a certain price and selling immediately after gaining similar to 1 cent or more. That was just the start, now we’re seeing complex AI taking decisions based on past experiences.

There’s certain unpredictability that’s taking place in the markets and there are certain times when that can be devastating. You can see a lot of examples in the book called Antifragile, it’s a really good read which requires plenty of patience but the same arguments will work outside of the stock market and that’s why that book was so fascinating for me.

 

What do you think about investing long term in the stock market?

For me, it’s so much uncertainty that makes me question if the dream of long-term in stocks is an option anymore.

This being said, I hope you have a productive day and if you have any questions feel free to ask in the comments.

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