Financial Markets Demon Hunters

For broad behavioral change, you need a villain. This logic was famously applied in the fight against Big Tobacco (“the villain”) and later, in the late 1990s, found its way into the food industry (“the sneaky food companies responsible for global obesity”).

And when it comes to money, demonization is never far away. Governments, central banks, and the monetary system itself are often cast as culprits. Statistics on inflation, debt, and money supply are presented in striking ways across (social) media, leaving many people – who have rarely thought about these topics before – both fascinated and alarmed. Questions arise: “Can this really be true? Is my money losing value?” Public debt keeps rising. And lo and behold, Italy hasn’t run a budget surplus since 1925. Austria isn’t doing much better either.

When fear becomes an investment strategy

Here’s the devilish part: none of this is factually wrong. But the same Cassandra warnings were heard one year ago, five years ago, ten years ago – indeed, fifty years ago. What’s changed are the channels through which this information spreads. Our fears are now nurtured within carefully curated echo chambers, creating an artificial sense of urgency to act right now. Otherwise, it might be too late.

Those who fuel fear usually have a solution ready – purely “selflessly,” of course. And their answers are as extreme as their tone: “Put all your money in Bitcoin, gold, or defense stocks.” Line charts moving neatly from the bottom left to the top right help reinforce the feeling.

A few years ago, it was anxiety about the planet that sparked a boom in renewable energy investments. But the dream of quick profits failed to materialize, and many of those stocks tumbled.

A better line of defense

Today, fearmongers celebrate gold and Bitcoin as the silver bullets against the demons of monetary debasement. But the future is always written later.

There is a better line of defense than precious metals or cryptocurrencies: a clear investment strategy that makes sense across the cycle. Balanced and executed with discipline.