When you think about it for too long, it can be easy to become overwhelmed by the whole business. We all do our best to put systems in place to cope with the ever-present uncertainty, but the bottom line is that the world is often a chaotic and confusing place that no process or amount of expertise and experience can make sense of. Right now it feels more chaotic and confusing than ever – a time when it is not unusual for things we thought a week ago to suddenly turn out not to be true anymore.
I must admit, as I have before, that I am struggling to make sense of the disconnect between what is happening on the markets and what is happening in the world at large. I look at the economic devastation wrought by Covid-19, the frightening scenes on the streets of the US’s major cities, and the increasingly aggressive foreign policy moves of China and can’t help but think that the market is downplaying the enormity of the risks that are brewing. And I worry that the fiscal and monetary stimulus being used to dig the world out of its Covid-shaped hole is simply kicking the can down the road once again towards a much bigger hole somewhere over the horizon. There has never been a stronger case for diversification, and if you did not already have it in place take advantage of the second chance the markets have now given you – just in case the respite is temporary.
But as investors we must be optimistic – the world has faced chaos of a similar, if not bigger magnitude in the past, survived it, and subsequently prospered. Chaos often gives birth to order, as old ways die and better approaches are found, like the environmental technologies we explore in the second instalment of our ‘new future’ series this week. Maybe such optimism is a bias in itself, but humankind’s long history of progress is perhaps the best and only guide we have to what the future may have in store.
