Yes, but only if the market has crashed very seriously. The same is with selling – historically it is good to sell only when markets have skyrocketed unprecedently.
Suppose I have invested USD 100 in stock two years ago. It has gained some positive or negative amount of dollars since then. What gains could I expect after one year if I invest USD 100 today? After analyzing historical data I see that future gains are almost certainly positive only when markets have had dropped more than 35% in two years from their original value. Also, future gains are almost certainly negative when markets have had grown more than 80% from their original value.
What: “Gain” is the amount in dollars one’s investment would change from the initial USD 100 invested. Investment is divided equally between Dow Jones Industrial Average and Nasdaq Composite indices. When: Monthly data between February 1985 and April 2020 Source: investing.com
One dot represents one moment in time between February 1985 and April 2020. So, if you sense, that after 6 months the price of stocks will be lower than today, it might be a good idea to start buying gold. Based on historical data, it will probably end up gaining you positive returns. Whereas oil gains are not that consistent.
This tiny analysis of scatterplots shows that gold is a safe-haven investment and oil is not so.
What: “Gain” is the amount one’s investment would change if USD 100 were invested six months ago. Stock is made from Dow Jones Industrial Average and Nasdaq Composite indices. Oil is represented by Crude Oil. When: Monthly data between February 1985 and April 2020 Source: investing.com
I never really understood investing in commodities. It seems that gold and oil gain more for long term investors when stock prices begin to go down and other investors seek alternative investments, thus raising the price of oil and gold.
After such interpretation, it seems that a recent increase in gold gain is probably caused by investors running from stock markets which are about to collapse, not anything related to gold itself. This might not be true.
However, oil gains have some significant fluctuations on their own.
What: “Gain” is the amount one’s investment would change if USD 100 were invested five years ago. Stock is made from Dow Jones Industrial Average and Nasdaq Composite indices. Oil is represented by Crude Oil. When: The chart begins in February 1990, but the data begins in February 1985. The most recent data is in April 2020. Source: investing.com
Sure. OECD Composite Leading Indicator (CLI) indicates it. It is surprising how sudden a drop in March 2020 is. Obviously, the only reason for it is the virus.
Will the recession become a crisis of a wider scope? Sadly, CLI does not reach that far into the future.
What: Composite Leading Indicator of OECD countries, amplitude adjusted, percentage deviations from long term average. GDP growth rate of OECD countries comparing month to the same month of the previous year. Both indicators are seasonally adjusted. When: February 1961 – March 2020. Where: OECD total, ~40 countries. Source: OECD
I believe you’ve heard about “Europe of two speeds”. But to understand whether those two speeds are really different we need to compare it to something. I picked two options – one is ASEAN, an organisation in Southeast Asia that promotes integration in economic, political and other fields. Another one is the USA and its states.
I’m comparing two core measures – GDP per capita and population. Boxplots at the bottom and the right side of the chart show us that the USA is a highly homogenous entity compared to the other two. If we look at population only, there seems to be a lot of variety in ASEAN, however, there are only 10 countries with one clear outlier – Indonesia. This country is not encircled in the scatterplot, and the encircling ellipses of the EU and ASEAN have quite similar widths. EU just has way more small countries.
Checking the GDP per capita gives a clear view of the diversity of the EU. If the two richest ASEAN countries are excluded, it becomes very homogenous – all the other countries are on the poor side.
Conclusion: EU is diverse even compared to Asian standards.
What: Population and GDP per capita in current USD (for ASEAN and EU) and GDP per capita in chained 2012 USD (for the USA). I believe this inconsistency is of minor influence since the diversity inside the group is what matters – comparisons of states and countries should not be made. When: 2018, except Population of the USA which is an estimate for 2019 Where: Countries of EU and ASEAN as well as states of the USA. Source: WB + BEA and USCB for USA states
Among my acquaintances, it is not very common to invest in something more sophisticated than pension funds, however, as this chart shows, in some countries more than half of the money in households are held in the form of equity, funds, bonds and other types of investments. This data does not show how many households invest, just the amounts of money. It is very likely that only a small fraction of the richest people account for the majority of money in the types of investments I focus on.
But let’s celebrate Estonia, Hungary, USA – I believe a lot of people make conscious decisions about money there. Are they good? That’s another question.
What: Distribution of household financial assets by type. When: 2018 Where: 36 countries form EU or OECD Source: Data was mixed from two sources, which seem to be very consistent: Eurostat – Household financial statistics + OECD – Household financial assets
After seeing that military spending has no visible relation to deaths in most regions I decided to investigate the special relation the USA has with the wars in the East.
Some major wars in the East are indicated on the chart. During those, the military expenditure of the USA seems to climb up. Data for deaths are available only from 1980, and I filtered out only the relevant region.
Is the USA the reason for those deaths? Or are those people just fighting among themselves, and the USA just gets involved? Does it worsens the situation, or improves? I’ll leave those questions open for now.
What: Military expenditure in constant USD + Deaths due to Conflict and Terrorism. When: Expenditure: 1949-2018, Deaths: 1980-2017 Where: Expenditure: USA only, Deaths: Middle East, North Africa, and Afghanistan Source: Institute for Health Metrics and Evaluation for deaths + Stockholm International Peace Research Institute for expenditure.
That seems not to be the case. There are many wars in Africa, but not so much money spent. Also, China and countries in Western Europe spend a lot, however, they’re not actively fighting (some missions to some hot spots do not count).
In the Middle East – the boiling point of wars – the biggest spenders are Saudi Arabia, which fights satellite war in Yemen, and Israel which fights against Palestine (as I understand it). But many more casualties come from Iraq, Syria, and Afghanistan, all of which seem to be a mixture of civil wars and satellite wars.
The special case is the USA which will have its separate chart.
This topic is so geopolitical, that I refrain from diving into deeper conclusions, but it’s tempting to say, that more weapons do not make more deaths. More stupidity does.
What: > Military expenditure in constant USD – some data for USSR and UAE were interpolated using very rough methods – just to fill the gaps and avoid fake jumps. This data have lots of gaps. > Deaths due to Conflict and Terrorism. When: 1980-2018 (Data for deaths until 2017) Where: Probably the whole world Source: Institute for Health Metrics and Evaluation for deaths + Stockholm International Peace Research Institute for expenditure