Which do you trust?
People love predictions. They distil the complex, messy world in which we live into simplistic soundbites. And provide a sense of reassurance.
If they chime with our own beliefs, then they become certainties.
Predictors love the inflated ego sense of being accorded some air-time.
Except when they are wrong. Which is most of the time.
✘ Experts and doomsayers have been predicting a recession every year since the GFC. That was 15 years ago.
✘ China’s economy is going to be bigger than the US in 2015 …2027….2030…or maybe not at all.
✘ Crypto’s the new currency …. Crypto’s a fad, Crypto’s a fraud… Crypto’s baaaack.
…… and the beat goes on.
But over time, shares do go up in value.
Not because they are a bullet-proof asset class. But because they are based on some fundamentals of human society:
- Business owners want to make a profit. As a reward for the risks they take, and to pay for their own wants and needs.
- They do that by providing goods and services that people will pay for. Which they do.
And that has been fundamental to human exchange since the advent of trade and agriculture.
Yes, markets can be volatile: at times gloomy, at others almost manic and frothy.
Businesses, though, keep on going. Individually they go through a natural lifecycle of birth, growth, death, or takeover.
As a feature of human society though they are essential. People want things, and some people will always look for the angle: how can they profit by providing those things?
It’s why over time, shares do well.*
And, if any of you are worried, I am happy to offer a complimentary Personal Financial Health Check, whether or not you are a client. Where we can review your personal finances and discuss some ideas about your goals. To find out more call 02 4926 7100 or book your appointment here.
* Historical returns or outcomes of an investment or strategy do not guarantee or predict the same or similar results in the future.