Making Sense of Markets
In March 2012, the Financial Times carried a front page story headlined 'Years of struggle for a jinxed generation'. It stated that 'For the first time in half a century, young Britons embarking on their careers cannot expect to be any better off than their parents…'
Before and since, there have been numerous analyses highlighting a gloomy future ahead, and with little qualification or equivocation. The prevailing consensus since 2007 has been that the economic world is in a dire state.
But are things really as bad as all that, or is sloppy thinking and excessively negative sentiment masking a more positive outlook?
Making Sense of Markets argues that received wisdom is still far too pessimistic, and that investment opportunities have been missed as a result. It suggests that the great panic of 2008 had its roots in finance, not a flawed global economy, and it tackles some popular concerns – debt, demography, Western decadence for example – head-on, showing succinctly why they have been overdone.
The book will then explain how investors can take advantage of these insights in building a long-term investment portfolio. It pays particular attention to behavioral influences such as the interaction of media and markets. It suggests that the conventional view of investing as a search for an optimal portfolio – as opposed to a satisfactory one – is misplaced. It argues that conventional financial analysis, not investors' living standards, may be the long-term casualty of the latest seizure in capital markets.
The recent gloom is understandable, but mistaken. Our children will likely be better off than we are and long-term investing is still worthwhile. This book provides a new, more positive outlook, and encourages investors to keep an open mind – and to keep investing.