Pessimistic, Yet Optimistic

As the market reaches new lows and the world appears to be descending into oblivion, it can be difficult to focus on anything other than the pending apocalypse.

Are things scary right now? Yes. Is inflation hurting people's budgets? Of course. Does the Fed appear to be making foolish decisions based on what the data shows? Probably.

Will things go on like this forever? While it may feel that way, the answer is almost assuredly "No!"

To assuage those concerned, I want to be clear that it's both understandable and acceptable to be pessimistic about the short-term. But, at the same time, it's still possible to retain our optimism about the long-term. I think most of us forget that you can feel both ways simultaneously.

As a great example of this, Jeremy Siegel, one of the great investing minds of our time, went ballistic on CNBC last week criticizing the Fed's approach toward monetary policy.

If you're a nerd like me, you'll find the numbers he shared to be stunning, and it offers some hope regarding the direction of inflation.

If you watch the video, it's clear that Siegel is quite pessimistic right now. But Siegel literally wrote the book on the value of holding equities for the long term. His book is appropriately titled Stocks for the Long Run, and given that the sixth edition is coming out next month, it's probably a safe assumption that he is still optimistic about the long-term future of stocks.

I believe we should be optimistic about the long-term too—despite the short-term issues—because it's the only rational perspective to have.

How could it not be? All of history says we should be. Repeat, ALL of history says we should be.

It doesn't mean it will be easy because, with history as our guide, the future will likely be punctuated by significant and scary downturns as well.

But having anything other than a positive outlook about our long-term future is simply ignoring the trends that are afoot. To pick just two…

First, it is estimated that 700 million people will join the global middle class by 2030. This means that 700 million people will soon shift their focus from survival to contributing to further human progress. Global extreme poverty has been collapsing for decades now, and the impact of this continued shift will be felt over the decades to come.

Second, since just 2016, another 1.5 billion people have gained access to the internet, bringing the total up to five billion internet users now. This means that these new middle-class consumers are gaining access to the rest of the world's knowledge, and we still have three billion more to go. What this trend means for the future of humanity is incalculable.

It's hard for me to look at these trends and be anything but wildly optimistic about the future of humanity and investing. Because it is trends like these that are likely to define the next few decades of the investment landscape—not the Fed, wars, inflation, or anything else that is short-term in nature.

These trends are unstoppable forces, and the public markets are how we participate in this ongoing expansion of global wealth.

And as optimistic as I am, I am sure I'm still underestimating the possibilities because compounding human potential is unfathomable.

So, while the short-term will always be uncertain and pessimistic at times, if we want to participate in this growth, it helps to stay focused on the bigger picture.