Welcome to today’s Arch capital market update!
Today I am going to talk about two key things:
- Do market forecasts really help us?
- Is the world really in that bad shape?
So, do market forecasts really help us?
When we look at this slide here, what it is showing is what was the best performing asset class for that year and what was the worst.
As can be seen, if we try to use this data here there is no way of predicting what asset class was going to be the highest performer next year. There are no identifiable trends or means of forecasting what is to come. The answer here is simply that market forecasts do not actually help us.
This leads onto the second part of is the world really in that bad of shape?
As we can see the market’s fluctuate, those on the bottom rise to the top and so on. This is where it is important to be diversified as it provides immunisation to these changes.
Finally, I have the book of the week to share with you!
It is called “Back to us” by Dr. Hans Rosling.
This book really helps us put in perspective that all this talk about doom and gloom and what is going to happen really the world is in pretty good shape now. There is always issues out there, but just getting a little perspective about the facts will really help us brighten up our investment decisions for the next year.