Investment Metaphor #2: Fractals

Second in my series on investment metaphors are fractals. According to Wikipedia, a fractal can be defined as "a rough or fragmented geometrical shape that can be subdivided in parts, each of which . . . is a reduced-size copy of the whole." It occurred to me that this might very well be an excellent way of describing the ups and downs of the stock market over various period of time. A quick Google search on the issue yielded the following site: Elliott Fractals. The site attempts to use the fractal paradigm as a benchmark for stock market analysis (see image below).

While this approach provides an interesting take on stock market analysis, I actually have a much simpler metaphor in mind for fractals' relation to investing: fractals are boring and repetitive. Each notch down or up in scale yields a copy of the original figure. While fractals are endlessly complex, they are also amazingly uninteresting for this very reason. Stock market analysis can be similarly complex, as Elliott Fractals illustrates. But this has little to no impact on a solid long-term investment strategy, which can be equally as repetitive and boring as a fractal. But that endless repetition of investing and compounding yields amazing results in the long-term. So while fractal stock analysis might be the latest craze in complex market analysis strategies, don't get lost in the details of the equations; embrace the repetitiveness of habitual investing and you won't be sorry.