William Godsave, Head of Financial Planning at Credo Wealth, explores what the growth of artificial intelligence and the excitement surrounding SpaceX can teach investors about portfolio diversification, investment risk and building a disciplined strategy for long-term returns.
Artificial Intelligence is reshaping industries at remarkable speed. At the same time, companies such as SpaceX have captured investors’ imagination, with SpaceX’s June 2026 Nasdaq listing standing as the largest initial public offering in history.
Whenever transformational technologies emerge, excitement naturally follows. Investors begin searching for the next market leader, commentators predict a new era of growth, and headlines focus on those companies expected to define the future.
This is just human nature. However, history suggests the story is rarely that straightforward.
While many of the world’s greatest investment opportunities have been created by technological innovation, identifying the technologies that will change the world is often easier than identifying the investments that will deliver the strongest long-term returns.
Why great companies do not always make great investments
This may sound counterintuitive.
A company can produce exceptional products, transform entire industries and grow rapidly for many years, yet still disappoint investors if expectations become too optimistic.
Investment returns are driven not only by how successful a business becomes, but also by the price investors are willing to pay to own it.
When expectations become exceptionally high, much of tomorrow’s success can already be reflected in today’s share price. SpaceX’s own debut is a useful illustration: shares surged sharply on their first day of trading, then gave back much of that gain in the weeks that followed, a reminder that even a widely admired, genuinely transformative business can see significant price swings once market expectations meet everyday trading.
This distinction is easy to overlook during periods of excitement, when attention naturally focuses on the businesses making headlines rather than the prices being paid to invest in them.
What previous technology booms can teach investors
Throughout history, each generation has experienced a technological revolution that appeared certain to reshape the economy.
Railways transformed transport. Electricity changed manufacturing and everyday life. The internet revolutionised communication and commerce. Today, Artificial Intelligence has the potential to be equally significant.
These innovations genuinely changed the world. Yet not every company associated with them generated exceptional returns for investors. Many early market leaders disappeared altogether, while others struggled to justify the valuations placed upon them during periods of intense optimism.
Technological success and investment success have never been exactly the same thing.
Why it is so difficult to pick future market winners
Investors naturally want to own the companies that will dominate the future.
The difficulty is that identifying those businesses consistently, before the rest of the market, is exceptionally challenging.
Even professional investors with vast research teams rarely outperform broad equity markets over long periods after costs. Markets rapidly incorporate new information, making it difficult for any individual investor to maintain a lasting informational advantage.
Rather than attempting to predict which single company or sector will outperform, many investors are increasingly adopting a different approach: owning broadly diversified portfolios that capture global economic growth wherever it occurs.
How diversification reduces investment risk
Diversification has sometimes been described as the only free lunch in investing.
Rather than relying on a handful of companies to deliver exceptional returns, this approach spreads exposure across thousands of businesses, sectors and regions.
As industries evolve, these portfolios naturally participate in the companies creating long-term value without requiring investors to correctly identify every future winner.
This does not mean simply holding “the market” and hoping for the best. Within such a portfolio, evidence-based investors can go further, weighting exposure toward the characteristics that decades of academic research associate with stronger long-term returns: companies that are attractively priced relative to their fundamentals, those with robust profitability, and smaller businesses with room to grow. Implemented systematically and at low cost, this kind of tilt is designed to modestly enhance returns above the broad market over time, without relying on anyone correctly guessing which individual company or technology will win.
The distinction matters. Searching for the single business that will dominate the next technological wave is, in effect, searching for a needle in a haystack. Structuring a portfolio to systematically capture the drivers of long-term returns across thousands of companies is a fundamentally different, and considerably more reliable, exercise.
This approach may appear less exciting than backing the latest market favourite, but history suggests it has often proved more reliable over the long term.
Why evidence-based investing beats market hype
None of this is to suggest that Artificial Intelligence will fail to transform the global economy. Quite the opposite.
The challenge is recognising that investment decisions should be based on evidence rather than excitement.
Successful investing is rarely about predicting tomorrow’s headline. More often, it is about maintaining a disciplined investment strategy through changing market conditions, staying broadly invested and avoiding the temptation to chase whichever opportunity currently dominates the news cycle.
Markets have always rewarded innovation. They have not always rewarded those who arrive late to the excitement.
Building a long-term investment strategy in the age of AI
Artificial Intelligence, SpaceX and other emerging technologies may well shape the next generation of economic growth.
The question for investors is not whether innovation will continue, but how best to participate in it.
For many, the answer is unlikely to be concentrating wealth in a small number of fashionable companies. Instead, it lies in building a portfolio spread across thousands of companies and markets worldwide, designed to capture long-term returns while avoiding unnecessary risks associated with trying to predict the future.
Innovation will continue to create extraordinary businesses. History suggests that successful investing is less about identifying every one of them and more about having a disciplined investment approach that allows long-term wealth to grow, whatever the next technological revolution may bring.
How PKF can help investors
Through our partnership with Credo, our Private Client team take a joined‑up approach to tax and financial planning, helping investors to create a diversified portfolio, mitigate investment risk and build a disciplined strategy toachieve their long-term goals. Please contact, Private Client Tax Partner, Stephen Kenny, and William Godsave, Head of Financial Planning at Credo Wealth for an initial conversation.
Important Notice
This marketing material has been prepared and issued in the United Kingdom by Credo Capital Limited (“Credo”). It is provided to you for discussion purposes only and does not constitute and should not be interpreted as either investment advice (including legal, tax or accounting advice) or a trading recommendation. This marketing material is not a solicitation to buy or sell any financial instruments or commodities, a recommendation to participate in a particular trading strategy or to invest into regulated or unregulated funds. The value of an investment can fall as well as rise and is not guaranteed, your capital may be at risk and you may not receive back your original investment in full.
PKF Littlejohn is not licensed to provide financial advice. Whilst Credo is independent from PKF Littlejohn, through a joint venture owned by PKF Littlejohn and Credo, PKF is entitled to a proportion of all fees arising from any advice given by Credo. If you have any questions about the relationship between Credo and PKF Littlejohn please contact your usual PKF Littlejohn contact or Stephen Kenny.
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