Have you noticed just how many positive headlines there are today compared with the start of the year?
No? Me neither. Yet….
- For 10 months in a row, US inflation has been falling – and soon interest rates will too.
- Energy prices have collapsed since all time highs last year. Which will drive UK inflation and interest rates down here.
- There are still many more jobs than people willing to work in them.
Or perhaps you’ve seen the value of the biggest, most successful and financially strong companies in the world is on the up?
These are the companies forming the bedrock of your investment strategy and portfolio. By our measure they up over 5% since the start of the year up 40% over 5 years (based on the performance of the large company investment most of you own). The “smart” money was running for the hills not so long ago. The smarter money hung around and has done well as a result.
The good news here is that, despite incredibly tough conditions including high inflation, much higher interest rates, staff shortages, war and doom and gloom everywhere these companies are worth more now than they were.
Why is that? Because they have adapted to conditions and continued to be profitable. They have gone from strength to strength.
How resilient are they? How resilient are you?
They indicate that the sentiment of investors around the world is generally positive – despite what the headlines would have you believe.
Many still put their faith in the great and the good to predict what comes next. But as from the FT makes clear even those with immense resources still get caught out:
Better luck next time? Or better to ignore them next time?
The same old, same old is playing out.
The financial press is hell bent on doom and gloom (it’s the only thing that sells clicks) and those in a position of authority and power stuff it up again.
In the meantime the rest of us – “the world” – quietly and confidently gets on with making things better.
We should always and forever trust in the power of the markets, of the hundreds of millions of workers out to improve their familiy’s lot every day. And we do that by being owners of great companies around the world.
It is they who create wealth that is then shared while others work to destroy it. The destroyers never win, the creators always do because their motives are pure and unassailable.
Today is better than yesterday, tomorrow will be better still.
That’s the history of humans for time immemorial.