The corporations in charge of our news consumption have long known that bad news is better for business than good news. Appealing to our base human instincts, the saying "if it bleeds, it leads" has become a de-facto motto for all but the most respected media corporations.
It's not difficult to understand how this has come about. With business models built around advertising revenue, selling more papers was necessary to sell advertising. Advertising brought in revenue which resulted in a profit.
However, there is another reason that bad news is favoured. Bad news tends to happen fast, often overnight. Think of any recent tragedy. Good news moves slowly and only seems remarkable after the passing of time.
If the headlines which are thrust upon us are not balanced with a more nuanced understanding of humanity's progress, we are at risk of becoming pessimistic about the future, which in turn will affect how we do our financial planning for the future.
Trends Worth Knowing
The average person is all too aware of what is going wrong in the world, with not enough appreciation for the mountains of progress made by humanity slowly but surely every day. This progress, compounding for two centuries, means that our daily lives would be the envy of Kings and Queens from just a few generations ago.
In 1820, 84 out of every 100 people lived in extreme poverty. Today that number is closer to 9. There could have been a newspaper headline published every day over the last 15 years that read, “Number of People in Extreme Poverty Fell by 192,000 Since Yesterday”. Unfortunately, these headlines don't sell advertising.
Similar statistics are available for child mortality rates, literacy rates, and the number of people living in a democracy - all key measures pointing to a brighter future for us all.
In the last two centuries, the number of children dying before age five has plummeted from 43% to 4%. The number of adults who can both read and write has increased from 12% to 86%, and the number of people living in a democracy has risen from 1% to 56%.
Faith In The Future
We believe it's reasonable to plan our futures on the assumption that this progress will continue, even if certain measures of progress are interrupted from time to time. Unlike the fictional Pollyanna, we don't think all is right in the world. We're aware of the problems and challenges that persist, but we refuse to be distracted from the wave of human progress that has been sweeping the globe for the last two centuries. We're not naive; we're rational optimists.
This worldview informs our investment approach, which is founded on a firm faith in the future. We’re confident of a future that's better than the present and much better than the past. We believe the trends explained above make this faith well-founded.
Humans are problem-solvers at heart, illustrated by how we've overcome tribulations throughout history. We have no reason to believe that humanity will not continue to make progress through various forms of ingenuity. And through one of the most wonderful inventions of our time, the public stock market, your family can now capture (and ultimately benefit from) this likely progress over time by owning shares of the Great Companies of the World.
Looking Ahead
We are excited to continue witnessing the marvel of human ingenuity and progress as we take on the challenges of our generation.
We hope you continue to play your part in this unfolding story, and we encourage you to remember that while bad news will always find a quicker way to our door, the good is happening gradually every day.
It is within this unfolding story that we continue to help you protect and grow your family's financial wealth, believing that the future you are investing for looks much brighter than today. The world has never been a better place, so why not benefit along with it?
