Is politics so far out there it’s starting to fade into irrelevance?
The crazier it gets, the more I look for beacons of rationality, especially when it comes to investing.
You simply can’t make investment policy out of what you think might happen politically. Or where you think the market is going, or the economy for that matter.
Those are all short-term considerations and therefore completely irrelevant to a long-term plan and investment strategy.
Thankfully, investment rationality is easily available to us all. Just cut away the noise and misinformation and get to the core of what really happens, all day and every day.
There are thousands of profit-seeking companies, run by mainly sensible men and women. Those men and women spend all their time responding to pricing information provided by seven billion people.
We (those seven billion people) continually make buying decisions in our own best interests. In turn, capital and other resources are allocated to meet those needs.
We, the seven billion, decide what we want and what we will pay for it. Companies respond in kind.
Politics simply can’t stop that happening; it can get in the way of it – and it does, often to our detriment. The more politics stays out of this interaction, the better it is for each and every one of us.
What’s been described is capitalism. What it achieves for all of us is remarkable, something of an ordinary miracle, and that’s what we should invest in.
And the crazier politics looks, the more capitalism looks like a haven of rationality.
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