10 Facts That Prove the World Is Getting Better
When I open a newspaper or turn on the news, it’s hard to be optimistic about the world. Despite this, I tend to be optimistic, which can come across as a bit naive in the investing world. As Morgan Housel puts it, “Optimism often sounds like a sales pitch, pessimism sounds like someone trying to help you.” But the opposite has proven true.
History shows us that long-term optimism is the right investment posture to have. Despite wars, depressions, financial meltdowns, and pandemics, the market has rewarded investors who have continued to be optimistic about the long-term growth of economies around the world. One of my favorite books, Factfulness, by Hans Rosling outlines many facts that prove the world is continuing to get better -
1) 200 years ago, 85% of the world lived in what would be considered extreme poverty (level 1 poverty). Today, only 9% do.
2) In just the last 20 years, extreme poverty has fallen 50%.
3) 80% of the children under 1 year of age have been vaccinated.
4) 60% of the girls in low-income countries now finish primary school.
5) 100 years ago, the average life expectancy was 51 in the US. Now, it is quickly approaching 80 and some of the happiest people are reported to be between the ages of 55-75.
6) 15% of the earth’s surface is protected and it continues to grow each year.
7) The number of babies who die at birth has dropped by 2/3 since 1950.
8) 75% of the world now lives in what is considered “middle-income.”
9) All of the following good things are regularly increasing – democracy, new music/movies, women’s rights, child cancer survival rate, girls attending school, electricity access, water access, and scientific discovery.
10) All of the following bad things are regularly decreasing - hunger, oil spills, infections, plane crashes, child labor, natural disaster deaths, nuclear arm counts, and ozone depletion rate.
All these facts support having optimism about the future, including economic growth around the world. Despite many reasons to be optimistic in the long run, it is still necessary to be realistic in the short term. There have been many 1, 5, and even 10-year periods where things have only gotten worse, and you have to be able to survive those periods to get any of the long-term benefits. Positioning your investments to have enough in conservative funds to weather these temporary storms is an essential element of proper asset allocation.
Happy Planning,
Alex
This blog post is not advice. Please read disclaimers.