Dear Members,

Lately, I have been pondering the imponderable: is life stochastic or deterministic?

Are we travelling along paths that were, in some sense, always going to unfold, or are our lives the product of an extraordinary sequence of accidents, encounters and improbable events?

The thought is strangely comforting. Particularly as I find myself, somewhat unexpectedly, back at AIWM and writing my first editorial.

Looking backwards, our lives have a curious way of appearing inevitable. One event seems naturally to lead to another. Decisions become turning points, coincidences acquire meaning, and the dots connect themselves into a reassuringly coherent story. But looking forward, very little ever feels inevitable.

Big words for a relatively simple question: are you where you are because of chance, or was there something almost inevitable about ending up here? There are clearly forces that constrain the paths available to us. Our genes, upbringing, previous experiences and current circumstances all shape what can happen next. And perhaps can is the important word. Because chance intervenes. An unexpected encounter. An illness. An economic shock. A missed flight. A conversation we almost did not have. An opportunity that appeared at precisely the right – or wrong – moment. An almost infinite number of seemingly insignificant variations can send a life down an entirely different path.

Then there is a third concept: chaos. A system can be deterministic in principle and yet practically impossible to predict because tiny differences in its starting conditions produce dramatically different outcomes. Weather is the classic example. Human lives are another. Markets certainly qualify. And, these days, Donald Trump’s next announcement occasionally feels like one too.

Evolutionary biologist Stephen Jay Gould famously illustrated the idea of contingency by asking us to imagine rewinding the “tape of life” and playing it again. His argument was that the result would almost certainly be different. The countless accidents and forks in evolutionary history that eventually produced us would not necessarily occur in the same sequence, and humans might never appear at all. Which is a rather extraordinary thought.

Perhaps life, then, is structured by causes, disrupted by chance and ultimately shaped by how we respond.

Markets, of course, suffer from much the same illusion. In retrospect, every crisis acquires a narrative. Of course rates rose. Of course the bubble burst. Of course that trade worked. Of course everyone should have seen it coming. We connect the dots backwards and construct a world that appears almost deterministic. But anyone who actually manages money knows that this is not how the future presents itself. The future arrives as a distribution of possibilities.

Markets are partly deterministic, partly stochastic and highly reflexive. Fundamentals matter. Interest rates matter. Cash flows, valuations, demographics, regulation and economic growth matter. But so do shocks, politics, sentiment, positioning and human behaviour. And market participants do not simply react to reality. They react to what they believe other participants will do. Those reactions can then alter reality itself. A narrative changes positioning. Positioning moves prices. Price movements change confidence. Confidence changes behaviour. The outcome becomes the product not simply of cause and effect, but of feedback loops layered upon feedback loops. Markets can therefore be predictable in distribution while remaining deeply unpredictable in path. We may have a reasonable view of where returns ought to come from over ten years and still have very little idea what the market will do next Tuesday.

Perhaps markets are not stochastic or deterministic at all. Perhaps they are something more uncomfortable: adaptive systems in which necessity, randomness and human behaviour continuously interact.

The same may be true of our industry.

Singapore’s independent wealth management ecosystem today looks very different from the one many of us entered. Regulation, technology, consolidation, geopolitics, generational change and the extraordinary growth of private wealth in Asia have all shaped it. Some of those forces were structural. Others were accidents of history. And our task, both as investment professionals and as an industry, is not to pretend that we can predict every turn. We can identify forces. We can assess probabilities. We can prepare for different scenarios. We can construct portfolios capable of surviving several possible futures. What we cannot do is know which particular sequence history has chosen for us until we are already living through it.

Perhaps that is also why communities such as AIWM matter.

If uncertainty is unavoidable, there is value in navigating it together: exchanging views, challenging assumptions, learning from one another and making our collective voice louder and more united. And while the future may arrive as a distribution of possibilities, there are at least a few things we already know are coming.

On 30 September, we will hold our AGM, followed by a Pub Quiz Trivia Night – finally a chance to discover whether all those wonderfully random facts accumulated over a lifetime will finally serve a useful purpose.

Later in the year, we will come together again for our year-end dinner. More details will follow, so watch this space and hold your breath.

And throughout the months ahead, expect plenty of educational, training and partner-led events designed to keep our community informed, connected and engaged.

Had we rewound the tape, perhaps none of us would be exactly where we are today.

But the tape was not rewound.

And so, here we are.

I am very happy to be back, and I look forward to seeing where we go from here.

Warm regards,

Chiara Bartoletti
AIWM Regulatory & Advocacy