This is the title of one of my favourite Jackson Brodie detective stories, and when I watch the TV news at the moment, its title often pops into my head. I probably ought to wait for the “And finally” moment before paying attention.
But there is a serious issue here and a relevant question was asked by a client about it. “How can shares and asset values be so high when everything seems so bad?”
After all, there’s a cost of living crisis, a terrible war and COVID hasn’t gone away. And there’s no denying the growing impact of changes to the climate. Surely, with all of this going on, asset prices should be on their knees?
The fact is that bad news grabs our attention. It tends to be fast moving and dramatic. Good news tends to be slow and, frankly, less interesting. There have been some interesting academic studies which demonstrate this but Tim Harford (statistics God) explains it very well in his book “How to make the world add up”. If a newspaper was only published every fifty years, its headline might be about how the end of the Cold War resulted in greater wealth for millions of people in Eastern Europe, or how medical progress has vastly increased life expectancy. These stories are slow and undramatic (“Millions of people lived a little bit longer today”), so they don’t make the news.
But these stories are behind the rise in asset values. Wealth continues to be created and our standard of living continues to improve as a result of human ingenuity. I’m writing this blog post on my laptop in an Airbnb in Swanage, connected by wi-fi to our VPN. I don’t know how long it would have taken me to explain this last sentence to the 30 year old version of me – there are so many new terms in it that describe the progress made in the last three decades.
It is the slow progress which we make that has increased asset values and improved our standard of living. Ironically, the development of 24 hour, web-based news has probably resulted in more bad news stories to grab our attention! There will continue to be ups and downs in asset prices, but, ultimately, those prices are supported by human ingenuity and invention, and they aren’t about to go away.
It’s unlikely that we will find Good News in the media – but it’s around us all the time, being ignored by us whilst quietly propping up share prices and asset values.
Philip Wise | email@example.com
Managing Director and Chartered Financial Planner