Written by Katie Gomez

“In the midst of every crisis lies great opportunity.” – Albert Einstein

The most successful people in life have an uncanny knack for identifying potential benefits in every situation. Specifically, traders and investors must learn to adapt to the crises around them while remaining aware of any possible ripple effects that could benefit them going forward. In this article, I’ll discuss the significance of leveraging current events to shape future trading decisions, and highlight a major opportunity amidst this year’s recession.

Historically, market trends have mirrored global events, causing specific sectors to take center stage. For instance, the aftermath of the tragic 9/11 event in 2001 resulted in a surge in security sector investments. Similarly, the announcement of COVID-19 in 2020 directed the spotlight on vaccine stocks. During the pandemic’s peak, as consumer behavior evolved, people gravitated towards home-service stocks such as Uber Eats, Docusign, and Peloton. These companies became exceedingly valuable due to the increased demand from people in quarantine or those relying on unemployment benefits.

The market is a dynamic entity, perpetually sensitive to socio-economic changes and quick to adjust accordingly. It is highly responsive to trends and fads, often highlighting certain sectors that could prove lucrative for various types of traders if timed right.

However, it is important to note that some trends are short-lived, and others can be so monumental they continue to impact the market. For instance, in the 90s, the internet was thought to be a “fad,” something that people got excited about but eventually would be forgotten. The internet expanded and progressed more than anyone would have expected 30 years ago, to the point where it completely transformed the world we live in today. 

What is the trend influencing certain sectors in the market today?

We might be on the brink of the next revolutionary sector – Artificial Intelligence (AI). Similar to the rise of the internet, AI could influence short-term investors and swing traders while also benefiting long-term investors. AI, still in its nascent stage, is shaping up to be the ‘new internet,’ with its growth trajectory reminiscent of the late ’90s tech boom.

 Those who dismiss a future with AI should reflect on the transformational impact of the internet over the past 30 years. AI, used in conjunction with humans, could create an entirely new reality in the next 30 years, maybe sooner. AI curates enormous sets of data and presents it to the worker, whether you are a writer, trader, engineer, coder, etc.

Not only is AI making the process of stock trading a lot easier for new traders, but it also presents new opportunities to profit from companies reliant on AI technology and inspire its growth compared to other (older) companies who fear it. AI’s occurrence and continued innovation (ChatGPT) have and will continue to influence the market, as it highlights certain stocks like SOUN, IONQ, AI, and BBAI. 

Summing up, while trends come and go, AI seems to be here for the long haul. Contrary to some predictions, its evolution is not decelerating. Instead, it’s accelerating, thanks to advancements like ChatGPT. For day traders, swing traders, or long-term investors, the AI sector promises ongoing opportunities. AI has become the buzzword of the decade, and those who invest in AI-supportive companies while the technology is still relatively emergent are likely to reap substantial short-term and long-term gains.