So far this year, volatility has increased across the FTSE 100, with sharp swings across sectors as investors react to shifting interest rate expectations, commodity moves, and geopolitical headlines. But for investors willing to look through short-term noise, this market is increasingly becoming a stock picker’s paradise.
The nature of today’s market
Today’s volatility is less about fundamental deterioration in businesses and more about speed. Investors are reacting to a constant stream of news flow, which encourages frequent trading rather than long-term thinking.
That can be dangerous for private investors. It’s certainly possible to make money by correctly calling short-term moves, but over time that approach is difficult to sustain and often leads to poor decision-making.
Instead, markets are increasingly being driven by sentiment shifts rather than any meaningful change in long-term value. The result is a pattern of overreaction followed by correction, as prices move ahead of — or fall behind — fundamentals.
In my view, this is increasingly becoming a stock picker’s market. Index-level returns are still heavily influenced by a small number of large companies. But beneath that headline performance sits a much wider spread of winners and losers driven by the specific strengths and weaknesses of individual businesses rather than the market as a whole.
For patient investors willing to ignore the daily noise and focus on business quality, that dispersion creates opportunity rather than confusion.
Volatile stock
RELX (LSE: REL) has earned a reputation as one of the FTSE 100’s premier long-term compounders, built on sticky customers, strong margins, and steady earnings growth. But after a sharp share price fall over the past year, investors are beginning to test that thesis.
At the heart of the debate is not short-term performance, but whether AI represents a structural threat to the business model. The concern is straightforward: if generative AI can search and summarise information, does that weaken the need for specialist data and analytics platforms?
That question has intensified as law firms and corporates begin experimenting with AI-enabled workflow tools such as Harvey and Legora. At first glance, it raises a simple concern — why pay for multiple systems if newer tools appear faster, cheaper, and more flexible?
Strong moat
To me, the market is still overpricing the disruption risk. RELX remains a high-quality FTSE 100 compounder, and I see recent weakness as a reaction to fear rather than fundamentals.
Large organisations do not run a single software ecosystem. They use dozens of tools across jurisdictions, tasks, and workflows. In that environment, AI is not replacing core research platforms, but being layered on top of them.
The key point is where value sits. The company’s moat remains anchored in curated, verified, and continuously updated legal, regulatory, and scientific data. AI can change how information is accessed, but it doesn’t easily replicate data ownership, trust frameworks, or compliance infrastructure.
A similar dynamic applies in risk and scientific information services, where a large share of revenue comes from machine-to-machine systems built on decades of proprietary data sets.
Too often the market throws out the baby with the bathwater. Trust remains at the centre of RELX’s business model, and that’s what underpins its customer relationships. On that basis, I recently added to my position during the recent share price weakness.
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Andrew Mackie owns shares in Relx.
