Don't make long-term decisions based on short-term information

The one thing that drives long-term stock market returns is earnings, which are driven by demand, says the writer. And with world population growth increasing, demand will also grow.
The one thing that drives long-term stock market returns is earnings, which are driven by demand, says the writer. And with world population growth increasing, demand will also grow.PHOTO: AGENCE FRANCE-PRESSE
The one thing that drives long-term stock market returns is earnings, which are driven by demand, says the writer. And with world population growth increasing, demand will also grow.
Christopher Tan

Data shows that despite occasional setbacks, stock markets always rise in the long run

People always tell me that the financial services industry is an exciting industry to be in.

Every day, either in the papers or on television, radio and social media, analysts will predict what will happen to the markets. Even non-professionals join in this guessing game. In the latest run-up to where the markets will be headed, investors were using the yield curve to forecast the future of the stock markets. So, what exactly is the yield curve and how is it used to predict the markets?

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A version of this article appeared in the print edition of The Sunday Times on April 21, 2019, with the headline 'Don't make long-term decisions based on short-term information'. Print Edition | Subscribe