What is in a statistic?

By Staff Writer
There is that old adage about lies and statistics, and it seems to be bearing out again. A statistic can be used to measure anything, but what you are actually measuring and what that really tells you may not be the same things. There have been two consumer confidence reports released recently, one positive the other negative, so who to believe?

 

 

The thing with consumer confidence indices is that they have a major effect on the psychology of the markets and Socionomics tells us that the invisible hand is often the prevailing mood or sentiment in the market and this mood will frequently be influenced by vested interests. There will always be bulls and bears, optimists and pessimists and depending on who is dominant at any one time will determine the direction of the market, rather than the underlying fundamentals. Economics works cetereris paribus but nothing stays the same and in the flux the invisible hand may direct the market rather than any notion of equilibrium.

Sentiment can create self reinforcing feedback loops that make the market perform as the mood dictates it to, rather than on actual value. So in an uncertain environment the best thing that you can do is be aware of tangible things like how much money you actually have in your savings account, and make certain that you use a budget planner. Then the market will continue to go up and down on a whim but you can choose to stay where you want to be.

Recent Articles

Featured Rating agencies may come knocking

It is only the middle of February, but the rand has already made two big moves. The first was the rand moving from R14.60 to R 13.20 at the beginning of the year, as emerging markets (EM) became fashionable again. The second was where the rand gave away nearly 90 cents in 2 weeks as the EM rally ran out of steam, and local events started to hit the headlines.

Read more

The cost of sending money home to neighbouring countries

Transferring money home within the Southern African Development Community (SADC) provides vital financial support for many households in neighbouring countries.

Read more

Student bank accounts: Which come out on top?

Being a student signals budgeting and not having a lot of money at your disposal. This means streamlining expenses such as your grocery costs and entertainment budget. But what if your bank account is in fact costing you more than you can afford?

Read more

Can you afford an ambulance in South Africa?

When a loved one is straddling the line between life and death, you won’t hesitate to call an ambulance. This week, Justmoney found out how much an ambulance ride costs in South Africa, whether you can refuse to get into an ambulance, and who pays the bill if you’re unconscious. 

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

President Hotel Easter Special

Price: From R1,500
When: 15 March to 30 April
Where: Cape Town

Kulula-Preskil Island Resort Special

Price: R16,999
When: 11 May -14 September
Where: Mauritius

A Touch Of Madness Tuck In Tuesday Special

Price: R70
When: Tuesdays
Where: Cape Town