Markets feel different today. Prices move faster. Reactions feel sharper. And short-term noise often drowns out long-term value. This is not your imagination. The plumbing of the market has changed and understanding how it works today helps explain both the risks and the opportunities ahead.
At Coronation’s Investment Forum earlier this year, Neil Padoa explained one of the most important shifts behind this change: the rise of the non-fundamental investor.
Linear thinking in an exponential world
Most of us think in straight lines. Markets do not.
A difference between earning 6%, 8% or 12% a year looks small at first. Over one or two years, it barely feels noticeable. Over thirty years, it is the difference between turning your capital into six times its original value or thirty times. Time does the heavy lifting.
The problem is that markets spend most of their time focusing on the early, flat part of the curve, where progress looks slow and boring. The real reward only appears much later, where compounding accelerates. Investors who think short term struggle to see this. Long-term investors benefit from it quietly and powerfully.
Shorter attention spans mean shorter holding periods
Our shrinking attention spans have spilled into investing.
Research highlights that adult attention spans on screens have fallen sharply, to around 50 seconds. The same behaviour shows up in markets. In the 1960s and 1970s, investors typically held shares for five to eight years. Today, the average holding period in the US is less than six months.
Many investors are no longer buying businesses and letting them grow. They are renting exposure and hoping to sell it quickly to someone else.
This creates a rare and valuable advantage. If your financial plan works on a five- to ten-year horizon, while much of the market trades on a five- to ten-month horizon, you start with an edge. You do not need to be faster or smarter. You simply need to be more patient.
Who is really setting prices today
The second major shift is who now dominates trading.
Passive investing has grown rapidly and now exceeds active investing in the US by several trillion dollars. Passive funds buy shares based on size, not on what a business is worth. When a company becomes larger in the index, passive funds buy more of it automatically.
Passive investing is not a bad product. It was designed for a world where most investors still analysed businesses and set prices. Passive investors could then follow along cheaply. Today, that balance has changed.
When you include high-frequency traders, algorithms and trend-following strategies, estimates suggest that around 70% to 80% of daily trading is driven by investors who do not analyse company fundamentals at all. They are not asking what a business is worth.
This matters because passive investing is not neutral. It is a firm decision to accept the market’s current view. And that view is increasingly shaped by short-term, non-fundamental behaviour.
Faster markets react harder and less selectively
The result is a market that overreacts more often.
Sharp and sometimes irrational price moves have become part of everyday market behaviour. Data from Goldman Sachs confirms this. Single-stock volatility around earnings announcements has roughly tripled over the past 25 years.
Short-term markets are not more efficient. They are less efficient than they used to be. Prices swing further away from long-term value, both up and down. For investors who focus on fundamentals and time, this creates opportunity rather than danger.
“Owning the market” is not the same as being diversified
Many investors believe that buying an index means broad diversification. Today, that assumption deserves a closer look.
The ten largest companies in the S&P 500 now make up close to 40% of the index, roughly double their weight several decades ago. Most of these companies sit in the same sector. Technology dominates. Buying the index today means making a large bet on a narrow group of recent winners.
Geography adds another layer of concentration. Over the past fifteen years, the US market has delivered roughly double the annual return of the rest of the world. As a result, the US now represents around 65% of global equity indices. A global market-cap index quietly assumes that this dominance will continue far into the future.
History shows that leadership changes. The current period of US outperformance is the longest on record. Mean reversion is not guaranteed, but neither is permanent dominance.
What this means for your financial plan
When we pull these threads together, a clear picture emerges.
Capital moves faster than ever. Most trading ignores fundamentals. Volatility has increased. Indexes have become more concentrated by sector and geography. All of this can feel uncomfortable.
For long-term investors, it is also encouraging.
If you can extend your time horizon, stay diversified beyond yesterday’s winners and focus on what businesses are worth rather than what they cost today, this environment is not hostile. It is fertile. The gap between price and value opens more often and wider than it has in decades.
This is why your financial plan emphasises patience, discipline and thoughtful diversification. It is not about predicting the next market move. It is about positioning your capital to benefit from time, not be punished by noise.
If you would like to explore how these ideas shape your portfolio, we are always happy to talk.
Source: Adapted from the plenary presentation by Neil Padoa at Coronation Investment Forum, March 2026.
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