What the Stock Market Taught Us This Year: Don’t Fall for These Investing Traps
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,801,261 (-0.31%)       Melbourne $1,086,414 (-0.06%)       Brisbane $1,259,422 (+0.30%)       Adelaide $1,077,611 (-2.35%)       Perth $1,110,681 (+0.09%)       Hobart $826,948 (-0.58%)       Darwin $908,863 (+3.96%)       Canberra $1,048,373 (-1.78%)       National Capitals $1,207,820 (-0.30%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $803,276 (-0.37%)       Melbourne $542,097 (+0.12%)       Brisbane $798,733 (-1.40%)       Adelaide $597,950 (+2.00%)       Perth $671,210 (-2.00%)       Hobart $562,046 (-0.18%)       Darwin $491,763 (-0.72%)       Canberra $507,709 (+1.96%)       National Capitals $643,376 (-0.47%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 12,387 (+387)       Melbourne 14,882 (+354)       Brisbane 6,612 (+197)       Adelaide 2,296 (+9)       Perth 4,934 (+22)       Hobart 888 (+16)       Darwin 120 (-1)       Canberra 1,158 (-15)       National Capitals 43,277 (+969)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,787 (+78)       Melbourne 6,641 (+3)       Brisbane 1,257 (-12)       Adelaide 351 (-10)       Perth 1,036 (+17)       Hobart 170 (+7)       Darwin 164 (-7)       Canberra 1,212 (+25)       National Capitals 19,618 (+101)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $800 ($0)       Melbourne $580 ($0)       Brisbane $680 (-$10)       Adelaide $640 (-$10)       Perth $750 ($0)       Hobart $618 (-$3)       Darwin $780 (+$28)       Canberra $720 ($0)       National Capitals $704 (+$2)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $780 ($0)       Melbourne $600 ($0)       Brisbane $675 ($0)       Adelaide $550 ($0)       Perth $700 (+$10)       Hobart $483 (-$8)       Darwin $610 (-$25)       Canberra $590 (+$10)       National Capitals $635 (-$1)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,453 (-149)       Melbourne 7,103 (-101)       Brisbane 3,545 (-101)       Adelaide 1,355 (-70)       Perth 2,127 (-61)       Hobart 178 (-12)       Darwin 66 (-2)       Canberra 353 (-33)       National Capitals 20,180 (-529)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 6,932 (-334)       Melbourne 5,104 (-487)       Brisbane 1,926 (-56)       Adelaide 414 (+12)       Perth 615 (-16)       Hobart 72 (-6)       Darwin 95 (-17)       Canberra 481 (-15)       National Capitals 15,639 (-919)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.31% (↑)      Melbourne 2.78% (↑)        Brisbane 2.81% (↓)     Adelaide 3.09% (↑)        Perth 3.51% (↓)     Hobart 3.88% (↑)        Darwin 4.46% (↓)     Canberra 3.57% (↑)      National Capitals 3.03% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.05% (↑)        Melbourne 5.76% (↓)     Brisbane 4.39% (↑)        Adelaide 4.78% (↓)     Perth 5.42% (↑)        Hobart 4.46% (↓)       Darwin 6.45% (↓)       Canberra 6.04% (↓)     National Capitals 5.14% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 1.4% (↑)      Melbourne 1.5% (↑)      Brisbane 1.2% (↑)      Adelaide 1.2% (↑)      Perth 1.0% (↑)        Hobart 0.5% (↓)       Darwin 0.7% (↓)     Canberra 1.6% (↑)      National Capitals $1.1% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 1.4% (↑)      Melbourne 2.4% (↑)      Brisbane 1.5% (↑)      Adelaide 0.8% (↑)      Perth 0.9% (↑)      Hobart 1.2% (↑)        Darwin 1.4% (↓)     Canberra 2.7% (↑)      National Capitals $1.5% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 26.5 (↓)       Melbourne 26.7 (↓)     Brisbane 25.3 (↑)      Adelaide 22.2 (↑)        Perth 30.3 (↓)     Hobart 26.5 (↑)        Darwin 20.2 (↓)       Canberra 26.9 (↓)       National Capitals 25.6 (↓)            AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 23.1 (↑)        Melbourne 25.9 (↓)       Brisbane 22.4 (↓)     Adelaide 22.2 (↑)        Perth 28.1 (↓)     Hobart 22.0 (↑)        Darwin 26.3 (↓)       Canberra 32.3 (↓)       National Capitals 25.3 (↓)           
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What the Stock Market Taught Us This Year: Don’t Fall for These Investing Traps

2023 has been a year in which investors have been more influenced by perception than reality. And that means opportunities in 2024.

By MELLODY HOBSON
Sat, Dec 16, 2023 7:00amGrey Clock 5 min

The uncertainty around near-term interest rates has dominated the story of the stock market in 2023. Perhaps not since the 1970s—when runaway inflation and sky-high interest rates were the crisis du jour—has monetary policy affected investment outcomes in such a pronounced way.

Yet look more closely, and it would seem that Wall Street has been more influenced by perception than reality: Company and individual balance sheets remain mostly healthy, businesses are battle tested and unemployment remains low. Similarly, the malaise surrounding the economic environment belies what we are seeing. Cruise ships are sold out, restaurants are packed, holiday shopping was off to a strong start and 82% of S&P 500 companies reported a positive earnings surprise in the third quarter.

Still, a nervous atmosphere has undercut stock performance. Scores of share prices have been lacklustre as company fundamentals have been eclipsed by macroeconomic conjecture. We have lost the trees in the forest.

But as someone once declared, “It is a market of stocks, not a stock market.” This is a wise reminder that no matter the conditions, there are investment opportunities to be had. In fact, the more economic obfuscation, the more sectors are hammered, the more stocks are orphaned, the better the odds of long-term investment success.

After a year of hand-wringing through monetary policy guesswork and market fluctuations, many wonder how best to maneuvre in the new year. Here’s our advice: Avoiding some of the biggest market traps can be a winning strategy.

Don’t Fed-watch

“Don’t fight the Fed” is a well-known market mantra. The idea is to buy stocks when the Fed is lowering interest rates and sell when the Fed is raising them.

This psychology has dominated the stock market all year, creating a futile guessing game. Are they still raising rates? For how much longer? Will rates fall soon? Will it be a hard landing or a soft landing? But this Fed obsession, reacting to every pronouncement, simply sucks up time. It has all been noise. Despite the fear and uncertainty, dire predictions didn’t come true.

What that means is that sectors that sold off because of heightened fears—including banks, some industrial names and anything real estate related—could be well-positioned for investors willing to take a longer-term view.

After surviving a midyear crisis, for instance, the banking sector is already beginning to show signs of recovery as market anxiety subsides. Similarly, oversold housing-related stocks should rebound once people adjust to the new rate environment, and the U.S. housing shortage, exacerbated by the pandemic, drives new construction.

It doesn’t mean every sector that got hit by investor angst is ripe for buying. Commercial real estate is an obvious example. But it does mean that if you invested by watching the Fed like a tennis match, and then reacting to every volley, you will get it wrong.

Don’t buy the hype

The selloff in many areas has inflicted pain that has been concealed by the cap-weighted dominance of a few celebrity stocks in the S&P 500 index. A handful of tech and tech-related stocks, weight-loss drugs and artificial-intelligence providers offer the sum total of stock-market outperformance this year. Beyond these headliners, there is less and less attention on individual names.

Those tech behemoths, dubbed the “Magnificent Seven,” account for more than 30% of the index and 87% of its return through October. Let us say that again: Just seven stocks represent one-third of the S&P 500 index. Some now consider Google parent Alphabet, Amazon.com, Apple, Facebook parent Meta Platforms, Microsoft, Nvidia and Tesla to be defensive businesses that can grow through any economic cycle.

We’ve seen this before, and the lesson is always the same: Winner-takes-all can dominate over shorter time frames but is rarely a winning bet in the long run. At some point, this narrow market supremacy will end, to the benefit of many overlooked issues.

In other words, these hyped celebrity stocks have more downside than upside from here. There are more-compelling opportunities to be had.

For example, the small-fry stocks found in the Russell 2000 index are among the most neglected shares waiting to get their due. The index has been languishing in a bear market since 2021—partially driven by their perceived economic sensitivity and partially driven by Wall Street indifference.

The result is that the total market cap of the Magnificent Seven is now three times the size of every single stock in the Russell 2000 index combined—making just seven stocks the equivalent of 6,000 small-cap names. On average, 47 analysts follow the typical Magnificent Seven stock versus just five for a small-cap name. Nine percent of smaller companies have no followers at all.

Here’s the silver lining: Less coverage means more market inefficiency means more opportunities. Stock prices trade on fundamentals. And when those solid fundamentals shine through, share prices rise. Additionally, when tepid U.S. growth inevitably picks up, small-caps are poised to strongly outperform as they have done every other time in the past.

The upshot is that you can go ahead and buy the hype if you want to, blinded by the celebrity names. But that’s not where the upside opportunities are likely to be.

Don’t anchor to the here and now

This time is different. Except it hardly ever is.

That’s a lesson investors rarely learn. Case in point: the extremely low interest rates that have persisted for much of the past two decades. Over the past 50 years, U.S. interest rates have averaged 5.98%. Today’s 5.5% rate seems high compared with the 0.25% paid during the recession of 2008, but no comparison to 1980 when rates topped out at 20%.

Similarly, at the start of the new millennium, a 30-year fixed-rate mortgage was 8.08%—basically in line with 2023 levels, but significantly higher than the bargain 2.96% rate that could be had just two years ago.

Higher interest rates now feel like a shock to our systems because we got anchored to some extreme lows. When considered in the full context of a longer history, though, they are in line.

Now people are anchored to the S&P 500 beating everything else. But just as we have seen with interest rates in 2023, the trend will revert to the mean, even if it takes a while.

Don’t fear volatility

Although it may feel uncomfortable, it is often easier to invest at the extremes—when valuations are crushed, buy signals are blaring and the bad news is priced in. Such conditions have the greatest profit potential, but the inherent volatility makes investors nervous.

This angst is playing out in the price action surrounding earnings announcements. FactSet reports that stocks are getting hit harder for negative earnings surprises. In turn, this drives up their volatility. In the third quarter, an earnings miss cost the typical company 5.2% in market value—more than twice the 2.3% average over the past five years.

Instead of running for the exits, we view volatility as our friend and actively seek to take advantage of the price movements. Everyone says they want to buy low, but when the opportunity arises, many wait for the dust to settle and miss the moneymaking moment.

Don’t bet against America

The market has turned more optimistic as the year winds down and we see plenty of value-beneath-the-surface stocks.

But even if investors have found some trees, they still have some concerns about the forest. Two terrible wars, congressional dysfunction, a border emergency and mounting unrest lurk over our economy as well as those around the globe.

In these unnerving moments, we are comforted by the faith in the resiliency of our capitalist democracy from capitalism’s own Yoda, Warren Buffett. He wrote in the 2012 Berkshire Hathaway shareholder letter, “Of course, the immediate future is unknown; America has faced the unknown since 1776…. Periodic setbacks will occur, yes, but investors and managers are in a game that is heavily stacked in their favour.”

Indeed, our markets have overcome a Great Depression, multiple recessions, global and regional conflicts, a modern-day pandemic and all other kinds of unforeseeable blows. Through it all, America has endured, and we have every reason to believe she will continue to do so.

Mellody Hobson is co-CEO and president, and John W. Rogers Jr. is founder, co-CEO and chief investment officer, of Ariel Investments.



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The computing revolution investors cannot ignore 

Quantum computing is moving from theory to real-world investment. Professor David Reilly says it could reshape finance, security and global technology infrastructure. 

By Jeni O'Dowd
Mon, Mar 9, 2026 3 min

For decades, the world’s computing power has quietly expanded at an astonishing pace.  

From the first transistor developed at Bell Labs in 1947 to modern processors containing billions and even trillions of transistors, each generation of technology has been faster, smaller and more powerful than the last. 

But according to quantum physicist and technology entrepreneur David Reilly, that era of effortless progress is beginning to slow. 

Reilly, CEO of Sydney-based Emergence Quantum and Professor of Physics at the University of Sydney, says the computing infrastructure underpinning modern economies is approaching fundamental physical limits. 

And that could have enormous implications for finance, artificial intelligence and global investment. 

Speaking at an industry event organised by Kanebridge International, Reilly said many critical parts of modern society depend on computing and the infrastructure used to process information. 

The slowdown behind the tech boom 

For years, the technology industry relied on a steady improvement known as Moore’s Law, where the number of transistors on a chip doubled roughly every two years.  

More transistors meant more computing power, allowing faster software, smarter devices and ever-larger data systems. 

Today, however, those gains are slowing. 

“It feels to me very innate that I’m going to just find that next year there’s going to be another breakthrough,” Reilly said. 

“But if you look at the data…there’s a slowing down, a roll off in performance that started some 10, 20 years ago.” 

Rather than making chips dramatically faster, manufacturers are now largely increasing computing capacity by packing more transistors onto each processor.  

The approach works, but it comes with growing complexity, higher costs and increasing energy demands. 

The brute-force race for AI 

That challenge is already visible in the massive data centres being built to support artificial intelligence. 

In the race to dominate AI, companies are constructing vast computing facilities that consume huge amounts of electricity and water. Reilly described this expansion as a “brute force” approach driven by the global competition to develop advanced AI systems. 

Yet the demand for computing power continues to accelerate. 

Artificial intelligence, advanced robotics, healthcare research, pharmaceuticals and cybersecurity all require far more processing capacity than today’s systems can easily deliver. 

The question now facing the technology sector is whether traditional computing can keep up. 

Enter quantum computing 

That is where quantum computing enters the conversation. 

Unlike conventional computers, which process information using binary switches that represent ones and zeros, quantum computers exploit the unusual behaviour of particles at the atomic scale. 

Reilly describes them as a fundamentally different type of machine. 

“So a quantum computer is a wave computer,” he said. 

Instead of processing information through simple on-off switches, quantum systems can use wave-like properties of particles to process many possible outcomes simultaneously. 

Those waves can interact in complex ways, reinforcing correct solutions while cancelling out incorrect ones. In theory, this allows quantum systems to tackle certain types of problems dramatically faster than classical computers. 

What it could mean for finance 

The concept may sound abstract, but its potential applications are significant. 

Quantum computers are expected to transform areas such as materials science, chemical modelling and pharmaceutical development.  

They could also help solve complex optimisation problems in logistics, finance and risk management. 

For financial institutions in particular, the technology could offer new tools for detecting fraud, analysing market behaviour and optimising portfolios. 

But the shift will not happen overnight. 

“One message to take away is that quantum is not going to suddenly solve all of your problems,” Reilly said. 

Instead, he said quantum systems will likely complement existing computing technologies as part of a broader and more diverse computing ecosystem. 

Why data centres may soon “go cold” 

One key change already emerging is how computing systems are physically designed. 

Many next-generation technologies, including quantum processors, operate far more efficiently at extremely low temperatures. As a result, future data centres may rely heavily on cryogenic cooling systems to manage heat and energy consumption. 

Reilly believes that the shift will gradually reshape the computing industry. 

“Over the next five years, you’re going to see data centres go cold,” he said. 

“And as that happens, they almost drag with them new compute paradigms.” 

Emergence Quantum, the company he co-founded, is focused on developing technologies to support that transition, including cryogenic electronics and integrated hardware platforms designed for quantum computing and energy-efficient systems. 

A new technological era 

For investors and businesses, the technology remains in its early stages. But the scale of global interest is growing rapidly. 

Governments, research institutions and technology companies are investing heavily in quantum research, betting it could become a foundational technology for the next generation of computing. 

For Reilly, the moment feels similar to earlier technological turning points. 

In the 19th century, new discoveries in thermodynamics helped drive the development of steam engines and the Industrial Revolution. In the 20th century, advances in electromagnetism led to radio, television and eventually the internet. 

Quantum physics, he suggests, could represent the next chapter in that story. 

“Today we have, as a society, in our hands new physics that we’re just beginning to figure out what to do with,” Reilly said. 

“But I think it’s an exciting time to be alive and watch what happens over the coming decades.” 

 

 

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