At a time when we are setting the wrong kind of records for market sentiment – investors and advisers alike think stocks suck, which is usually a very good time to find good value in this asset class – and £$billions are being pulled from the market each week and moved into low-interest, low-return options like bond funds and cash deposits, the above chart serves as a stark reminder of our goldfish-like memories.
There’s an old ‘Lion’s Parable’ about a family that took in an abandoned cub who, despite being loved and cared for by the family, once grown decided to eat them all. Ouch! And in a not-so-obscure way that parable, and recent events, remind me of what’s going on with oil in the minds of investors.
Ok, so now that the entire world seems to think we’re about to be engulfed in a deflationary spiral, I’d like to call for a moment of silence. May deflation rest in peace….and may the new monster be birthed: Inflation.
Do we have an intuitive path to managing our debts? We sure do…and it sucks. And despite the logic of paying off the debts with the highest interest rate first, we tend to try and knock of the small debts first regardless of compound interest.