Science vs. Stories: How Data Can Supercharge Your Investment Strategy

Markets showed uneven strength as AI gains offset sector-specific weakness

The quick scan: On Monday, 3 November 2025, U.S. stocks closed higher overall, but the gains masked a split market – tech-heavy indexes moved ahead while the Dow fell.

S&P 500: +0.17% to 6,851.97 – lifting slightly on strength in large-cap tech
Dow Jones: –0.48% to 47,336.68 – weighed by weakness in the healthcare sector
NASDAQ: +0.46% to 23,834.72 – led by gains in AI and cloud-computing names such as Amazon and Nvidia

What’s driving it: A blockbuster $38 billion cloud-deal between Amazon and OpenAI triggered a rally in tech, as did increased optimism around AI and chip-spending. Meanwhile, caution set in elsewhere: the ongoing U.S. government shutdown continues to withhold key economic data, adding uncertainty to the timing of future cuts by the Federal Reserve.

Bottom line: For L-Plate Retirees this means: The market’s engine has shifted into gear, but it’s not a full-throttle run yet. Tech and AI are leading, but much of the broader market is pausing. Stay diversified, protect your core holdings, and keep some cash ready – because when enthusiasm leads, the risk that other sectors fall behind is real.

Applying Science to Investing: When Experts Skip the Lab

The scoop: One of the most insightful reads this week came from The Business Times, which observed that investors today seem to have forgotten the scientific method – the very process that underpins rational decision-making. In other words, markets have become more about beliefs than proofs.

The scientific method – hypothesis, testing, observation, revision – has powered breakthroughs in every field from medicine to technology. Yet in investing, it’s increasingly sidelined by narrative. Investors latch onto ideas that sound true (“stocks always go up over time”, “buy the dip”, “crypto hedges inflation”) without rigorously testing whether those statements still hold up in today’s environment.

The article gives a fascinating example from academic finance: researchers once believed that stocks outperform after dividend cuts, under the assumption that firms “reset” to grow again. When the theory was tested across multiple decades, it didn’t hold – in fact, performance was often weaker. The lesson? Even the smartest-sounding logic needs validation.

This applies to nearly every corner of modern investing. From meme stocks and AI trades to “safe haven” assets and currency correlations, markets are filled with untested assumptions repeated so often they begin to feel like facts. As the author points out, “faith-based investing” can be comforting – it gives certainty in a world of uncertainty – but it’s also dangerous because it discourages ongoing inquiry.

For L-Plate Retirees, this message hits especially close to home. Many of us rely on well-meaning financial rules passed down over decades: “own blue chips for safety,” “property never loses value,” “bonds protect you in every downturn.” Some of these may still work – but only if the data backs them in current conditions. The hallmark of smart investing isn’t certainty; it’s curiosity.

If anything, applying a scientific mindset to your portfolio doesn’t mean doing experiments with your savings – it means questioning what you think you know, tracking results objectively, and being willing to update your approach when the evidence changes.

Actionable Takeaways for L-Plate Retirees:

• Replace belief with testing: Don’t accept a strategy just because it’s familiar or popular. Ask: has it been tested across multiple market cycles or geographies?

• Check your data sources: Evidence from back-tests or long-term studies beats soundbites on social media or a single fund manager’s claims.

• Track your own evidence: Keep a personal record of your investment decisions, reasons, and outcomes – it’s your mini-lab for learning.

• Be sceptical of absolutes: If a strategy “always works,” it probably hasn’t been stress-tested enough. Real investing success adapts, it doesn’t promise.

• Stay humble and iterative: Science thrives on revision – so should your portfolio. Update your views when new evidence emerges instead of defending old ones.

Your turn: 
What investment “truth” have you been treating as gospel?
If you looked at your own results objectively, would the data still back it up?

👉 Hit reply and share your thoughts – your answers could inspire fellow readers in future issues.

☕ If today’s read reminded you that curiosity is the investor’s greatest defence, you can shout me a coffee on Ko-fi.

Resource:
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