This can be somewhat easy to forget in times like these, and it is just as crucial, if not more so, to be aware of the positivity in our local communities and beyond as it is to be cautious of the less savory events that might be occurring on our doorstep, despite what we might read online or across social media.
The Netherlands in crisis
This being said, whilst vacationing in my home country of The Netherlands over the past weeks, I came to realise that there are quite a number of crises there at the moment: a housing-crisis, immigration-crisis, nitrogen-crisis, energy-crisis, inflation-crisis, just to name but a few of many more. However, bizarrely, the restaurants are full, as is the primary airport and The Netherlands’ longest serving PM in its history remains firmly in his position. These observations are incongruent with at least some of the adversities listed above, and perhaps imply a disconnect between the widely-accepted narratives that seem to spread like wildfire with the assistance of social media, and the tangible reality of the world in which we live.
The bear is coming
External commentary covering financial markets is not immune to this, and as accurately predicting the future can have a very large impact on your financial situation, there is a lot of room online for those who say they can do so. The problem is, a moderate view will not get you the attention from the audience. Someone who consistently predicts a bear market will at some point be correct and so the reputation of the pundit can receive a significant boost, meaning that their future predictions will be viewed as more credible. Often, the number of times where this same pundit’s predictions have not come to fruition is then conveniently left unmentioned.
How to handle it
So how do I prevent this negativity from affecting me personally? I do not bury my head in the sand and avoid social media, nor do I stop engaging with local or global news, and I’m certainly not suggesting that the crises are not sincere concerns, as there are obviously developments in the world that affect us personally and financially. However, I find it useful to keep in mind the efficacy of employing drama and exaggeration when it comes to publicity and focus on the hard data instead. Try to find those who provide counterarguments to the general consensus online and judge the quality of their arguments. Remain open to different opinions, rather than dogmatic. With each opinion you hear expressed, take some time to investigate the background of the person expressing it. May there be an agenda set to profit from making you believe one way or the other? What do they stand to gain from your engagement with their perspective? The above, despite sounding somewhat cynical, doesn’t imply you have to be contrarian per se, rather try to be a realist.
Arguably, the most valuable commodity in the world for an investor is information. As an international financial advisor, one of my main responsibilities is to read, analyze and evaluate the public information regarding (geo-)political, economic and financial developments, in order to be able to adequately assess the opportunities, the risks and the impact the developments may have on my clients’ portfolios. Contact us in the Lisbon office today to learn how we can also be of value to you.
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This communication is for informational purposes only and is not intended to constitute, and should not be
construed as, investment advice, investment recommendations or investment
research. You should seek advice form a professional adviser before embarking
on any financial planning activity.