IT DEPENDS
Dear Client
In his book “How not to be wrong” –
“The power of mathematical thinking”, Jordan Ellenberg writes: “Which way you
should go depends on where you already are”. It is good advice for anyone trying
to make sense of the financial world, where an honest answer to nearly every
question is, “it depends”. Stock prices are high, so future returns might be
low, something like 3%-4% a year after inflation. In other words 10% - 6% = 4%.
Is that bad? Compared with the past 80 years, yes. Compared with returns on
bonds or cash, it is a God send.
Always asking, “Compared with what?”
“Compared with when”? is a good way to make better decisions in a world where
the path of least resistance often pushes you towards a poor
one”.
Friendly
greetings
Andre
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