A picture tells a thousand words. Not all of them true

A picture tells a thousand words. Not all of them true

FTSE 100

We’ve just had a prime example of why statistics and reports need to be taken in context. The stock market has had its fastest drop in its history. If you have investments and have check the value (we shouldn’t, but we do!) you’ll have seen ‘losses’ of over 30%, depending on when you looked.

That by any standards is a large drop, but it’s the speed it happened which makes it so remarkable. Anyone investing in the stock market and not expecting large drops once in a while really shouldn’t be investing in the stock market.

The interesting thing though is that April had the second highest month gains in decades. The FTSE 100 is still (at the time of writing) around 23% below its peak earlier this year. I’d like to say I didn’t buy anything while it was at its peak, but…

I suspect we’ll have another good example in a month. Car sales were down 97% last month. Hardly surprising when all dealerships are closed. However as they start to re-open, the relatively small (~4000) sales will be eclipsed, thus prompting our annoyingly ignorant journalists to claim that car sales are up 10,000%…

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