Wealth and Wisdom: Week of August 25, 2025
- Mike Brown
- Aug 25
- 4 min read
The financial markets have become dependent on good news from tech companies and the enormous promise that artificial intelligence brings to the global economy. And the recent tech stock selloff might be an indication that investors have gotten ahead of themselves.
Technology is the future, as it always has been. By simple definition, technology means the practical application of new knowledge and thinking. Stone tools were a hot new technology at one time. So were electricity, railroads, computers, the internet, and smartphones. AI is simply the latest example of another technology with the power to change the world.
The problem with investing in technology is that success largely depends on things that haven’t happened yet – and might indeed never happen. Exciting new ideas lead to lofty expectations. Lofty expectations lead to lofty stock valuations. Technologies that don’t pan out or can’t be implemented profitably can lead to huge investment losses. And even in the case of companies that do eventually succeed, stock prices often get far ahead of fundamentals, creating sharp pullbacks and volatility. Case in point: the NASDAQ composite index – heavily dominated by tech and telecom stocks – dropped nearly 80% in the 2000-2002 dot-com bubble collapse.
If you’re trying to accumulate wealth – or maintain it – technology can be a rewarding long-term investment. And thankfully, 80% market drops don’t happen often. But if tech stocks are a part of your portfolio, your success in the long run will require that you put up with unsettling volatility and occasional sharp pullbacks in the short run.
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Words to the Wise
“Wealth isn't primarily determined by investment performance, but by investor behavior.”
– Nick Murray, author
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