Optimism: The World is Becoming a Better Place
With an improving world, we believe frontier markets will achieve the greatest gains. There are many troubles in the world today, including nuclear proliferation, terrorism, religious fundamentalism, diseases like AIDS and bird flu and global warming. Because of these troubles, many people hesitate to invest for the long term, and yet problems will always be with us.
Nick Murray, in Financial Advisor, October 2006, calls this the “tyranny of current events”. He points out that the Dow Jones Industrial Average has gone from 200 to 12,000 while we have endured World War II, the Korean War, the Cuban Missile Crisis, the Cold War (and its Mutual Assured Destruction), Vietnam, the assassinations of President Kennedy and Martin Luther King, the financial meltdown of October 1987, September 11th, 2001, the scandals of Enron and Worldcom, the technology stock bubble and more.
These events, and the fears of more like them, have prevented many investors from benefiting from the growth of the world economy and its financial markets. While the progress of mankind has been irregular, it has been positive. Certainly the next twenty years will bring their share of headline disasters, yet we believe that progress will continue; and we believe financial markets will continue to move higher.