Slow and Steady: Why Patient Investing Beats Chasing the Latest Trend

Remember the old story about the tortoise and the hare? The overconfident rabbit sprints ahead while the steady turtle plods along—and ultimately wins the race. That ancient fable has never been more relevant to today's investment landscape.

Right now, we're witnessing something extraordinary in the financial markets. Billions of dollars are flooding into artificial intelligence infrastructure at a pace that rivals some of the most dramatic investment booms in history. In tiny Ellendale, North Dakota—population 1,100—there's a half-built AI facility with a price tag exceeding $15 billion. To put that in perspective, that's roughly a quarter of the entire state's annual economic output.

The question every investor should ask: Is this sustainable, or are we watching another chapter in a familiar story?

This isn't the first time investors have been swept up in technological excitement. History shows us similar episodes that ended painfully for those who abandoned discipline and chased the hype.

In the 1920s, automobile sales exploded from 4,000 cars in 1900 to 2.5 million by 1925. Aeroplanes and radios captured the public imagination. The stock market soared—until it didn't. Those who concentrated their investments in the hottest sectors suffered devastating losses.

The 1960s brought the space race and emerging technologies. Investor confidence ran high until economic pressures caused a severe market downturn in 1973-1974. Once again, concentrated bets on trendy sectors proved costly.

Then came the late 1990s internet boom. Companies with little revenue but big promises saw their stock prices skyrocket. Federal Reserve Chairman Alan Greenspan famously warned about "irrational exuberance" in 1996—nearly three years before the bubble burst.²

The cost of chasing that trend was staggering. Research examining investor behaviour during the volatile NASDAQ period between 1973 and 2002 found that those who jumped in and out of investments underperformed a simple buy-and-hold approach by an average of 5.3% per year.³In other words, investors who chased the hot stocks and then panicked during the crash paid an enormous price for abandoning discipline—largely because they jumped on the technology bandwagon too late and caught the worst of the dot-com collapse.

Over the past three years, major technology companies have committed more money to AI infrastructure—data centres, chips, and energy systems—than it cost to build America's entire interstate highway system (adjusted for inflation).⁴

The problem? Nobody knows when or if these massive investments will actually pay off. Even industry leaders acknowledge the uncertainty, with one CEO expressing hope that AI adoption wouldn't take 50 years like electricity did.⁵

What makes this particularly concerning is the herd mentality driving these investments. When everyone is rushing in the same direction, it's worth pausing to ask whether we're witnessing innovation or speculation.

Fear of missing out—FOMO—is one of the most powerful emotions in investing, and it's also one of the most dangerous.

When you hear about friends, colleagues, or neighbours making quick profits on the latest hot investment, it's natural to feel like you're being left behind. The urge to jump in becomes overwhelming. But this emotional decision-making is precisely what leads to poor outcomes.

History is littered with examples of investors who abandoned their principles because they couldn't stand watching others get rich. Many of them ended up buying at the peak, just before the crash. They let emotion override discipline—and paid dearly for it.

Here's what the research tells us: Studies examining 19 major stock markets around the world from 1973 to 2004 found that investors who tried to time the market and chase performance underperformed a simple buy-and-hold strategy by an average of 1.5% per year.³ That might not sound like much, but compounded over decades, it represents a substantial loss of wealth—all because investors couldn't resist the urge to chase what was hot.

Conventional wisdom suggests that taking bigger risks should lead to bigger rewards. But history tells a different story.

Research examining U.S. stocks from 1968 to 2012 revealed a startling finding: a dollar invested in the 20% of stocks with the lowest volatility grew to $81.66, while a dollar invested in the 20% with the highest volatility grew to only $9.76.⁶

Read that again. The supposedly "safer" stocks dramatically outperformed the high-risk ones over the long term. This phenomenon, known as the "low-risk anomaly," completely contradicts what many investors believe about the relationship between risk and reward.

Why does this happen? High-quality companies with stable earnings, competitive advantages, and low debt tend to have less volatile stock prices. While they might not provide the excitement of a hot technology stock that doubles in a month, they also don't crater when market conditions change. Over time, that stability compounds into superior returns.

The antidote to FOMO and trend-chasing is diversification paired with discipline.

Diversification means spreading your investments across different types of assets, industries, and approaches. It's not exciting. It won't generate impressive stories at dinner parties. But it's the foundation of long-term investment success.

When you diversify properly, you're protected when any single sector or trend collapses. While concentrated bets might generate spectacular short-term gains, they also expose you to spectacular losses. Diversified portfolios provide steadier, more reliable growth over time.

A well-structured portfolio should address both your short-term and long-term needs. The goal is to have enough reliable income sources—through dividends, interest, or guaranteed income—to cover your expenses for at least five to ten years without being forced to sell investments during a downturn. This protects you from what's called "sequence of returns risk"—the danger of being forced to sell at beaten-down prices early in retirement, which can permanently impair your financial security.

Think of diversification as your investment insurance policy. You hope you won't need it, but you'll be grateful you have it when markets inevitably shift.

Discipline means sticking to your investment plan even when it feels uncomfortable. Especially when it feels uncomfortable.

During the late 1990s tech boom, disciplined investors who maintained diversified portfolios watched their returns lag behind those chasing internet stocks. It was frustrating. Some questioned whether they were making a mistake. But when the bubble burst in 2000, those patient investors were protected while concentrated portfolios were devastated.

The same pattern played out in the 1920s and 1960s. The hares raced ahead initially, but the tortoises ultimately won.

Here's the hard truth: tortoise-style investing often underperforms during bull markets, which tend to be long. Then, when bear markets arrive—which are typically nasty but short—the tortoise approach shines by protecting your capital. The problem is that human psychology makes those long bull market periods incredibly difficult to endure. Watching others rack up gains while your steady approach lags behind tests every investor's patience.

But those who stay disciplined through complete market cycles—from peak to peak—consistently come out ahead.

Discipline means asking hard questions before making investment decisions:

You don't need to avoid new technologies or hide your money under a mattress. Innovation is real, and transformative companies do emerge. The key is maintaining perspective and discipline.

Instead of chasing whatever investment everyone is talking about, focus on building a well-diversified portfolio that aligns with your long-term goals. Include a mix of different sectors, asset types, and investment approaches. Focus on quality companies with competitive advantages, reliable cash flows, and sustainable business models rather than the latest trend.

This might mean you won't capture every spectacular short-term gain, but you'll also avoid catastrophic losses. More importantly, the evidence suggests you'll likely end up with better returns over the long term—without losing sleep during market turmoil.

Remember that successful investing isn't about being the smartest person in the room or perfectly timing every trend. It's about staying disciplined when others aren't, maintaining diversification when concentration seems tempting, and ignoring FOMO when it whispers in your ear.

Even if a disciplined approach doesn't beat the market over the long term, matching market returns with significantly less risk and stress is a genuine form of outperformance. It means you're more likely to stay invested during downturns, avoid panic selling, and ultimately achieve your financial goals.

In Aesop's fable, the hare's overconfidence was his downfall. He assumed his speed alone guaranteed victory, so he stopped being strategic. The tortoise won because he kept moving forward at a sustainable pace, never distracted by showmanship or shortcuts.

As investors, we face a similar choice. We can chase the latest fad, concentrate our bets, and hope we're smart enough to get out before the crash. Or we can maintain discipline, stay diversified, and let time do the heavy lifting.

History has shown us which approach works over and over again. The question is whether we'll learn from it.

Slow and steady really does win the race.

This document is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed.All investments involve risk, including the potential loss of principal. Leveraged ETFs and other complex investment vehicles may not be suitable for all investors and should only be used with a full understanding of their risks. Asset class performance varies over time, and diversification does not ensure a profit or protect against a loss. Every effort has been made to ensure that the material contained in this document is accurate at the time of publication. Market conditions may change which may impact the information contained in this document. All charts and illustrations in this document are for illustrative purposes only. They are not intended to predict or project investment results. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. The opinions expressed in the communication are solely those of the author(s) and are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. Mutual funds and other securities are offered through De Thomas Wealth Management, a mutual fund dealer registered in each province in which it conducts business and a member of the Canadian Investment Regulatory Organization (CIRO)