Let’s take a bet on what happens now financial markets have experienced a recovery since the distress experienced by banks and other financial institutions in 2008. Ten years later, what’s going on?
Things are getting back to normal in the vernacular of people participating in the market. Normalisation, to turn a noun into a verb, has begun. People who have been in the market for the last few years have probably succeeded in growing their wealth. Let’s Compare Bets’ tips have done pretty well to.
People with money to plough into financial markets may be scratching their heads wondering what should I do…. advice, bank account, premium bonds (in the United Kingdom), under the mattress, start a business, travel around the world, or, have a craic and wager some of this money personally into financial markets.
Other posts in this series have gone into detail about what’s happened in the past and some predictions about what’s going to happen in the future. In the context of full disclosure, we’re not messiahs at Let’s Compare Bets, in so far as you won’t find any messianic prophecies here and there will be no mention of the apocalypse. What you will find is some ideas about where to place your bets: which have been cobbled together using some voices in the market that have had interesting things to say. Sources have been named at the end of the post in the tradition of scientific publication (but there won’t be individual citations because this a post about betting. Let’s Compare Bets doesn’t want to reinvent the wheel!). After you listen to a various voices in the market you also get a feel for who you trust and who you don’t. Trust is a dynamic and complex concept and changes constantly. After listening to voices in the market a bit of objectivity about who you trust allows you to filter out different people and sources of information. Rather than deciding if the person or organisation was likeable: you know, what sports do they like, are they idiosyncratic, aggressive, or arrogant etc , it’s possible to be objective about the process. In the process of learning a bit about the economy and financial markets, bits and pieces from sources perceived trustworthy have been cobbled together here so that readers can make better bets.
Previous posts in the series can be accessed from links at the end of the post. Among other things we’ve spoken about how to frame your view of investing in the context of world wide trends and how to bet your funds now the current economic expansion is maturing. To illustrate certain points about financial markets and relative returns exchange traded funds or ETFs will be used in this post. Also there will be some candid pithy comments from the Author to spice things up a bit, and the odd anecdote.
Let’s condense some major trends first, then look at where to place your bets in the context of the current cycle (debt cycle and business cycle). Unfortunately this isn’t a short post. It is difficult to get everything in and it be a short post.
Technology is accelerating and will increase productivity of the economy (it doesn’t necessarily mean jobs losses in aggregate over the long term if productivity can keep up, but it’ll be your kids or kids kids who’ll really benefit). Talking about reinventing the wheel, as an aside point, readers might like to check out how Goodyear is doing just that with their Eagle 360 spherical tire. Technological advancement is said to reach inflection points that allow human endeavour to progress in leaps and bounds. Amazing how the internet has reached so many people and allowed information to reach curious minds. Having visited the Roman Forum recently, knelt at the foot of the Temple of Saturn staring up at the preserved pediment restored for the senate and the people of Rome (wishing I could read Latin) with the low December sun warming my face it struck me like a bolt of lightening from Jupiter’s very hand (or should I say Zeus)……. the Plebs have never had it so good! That’s down to technology and access to information. It’s no wonder the combined market cap of Google and Microsoft is higher than the GDP of Spain.
Debt. We’re past the bottom of the long term debt cycle; in terms of interest rates, the bottom is when central bank interest rates go to zero in some countries and negative in others (and are currently still negative in some countries). Now interest rates are going back up, but, they may bump along the bottom first. Biblical amounts of debt, and when the total aggregate amount of debt gets biblical it leads to change.
Change. Change in politics, structural changes to economies and increased geopolitical activity or realpolitik. Bringing us nicely into the last major trend that’ll be shared with readers for this post….
A rise in the number of inquisitive minds inspiring creativity, and more technological advancement.