Yes, but only if the market has crashed very seriously. The same is with selling – historically it is good to sell only when markets have skyrocketed unprecedently.
Suppose I have invested USD 100 in stock two years ago. It has gained some positive or negative amount of dollars since then. What gains could I expect after one year if I invest USD 100 today? After analyzing historical data I see that future gains are almost certainly positive only when markets have had dropped more than 35% in two years from their original value. Also, future gains are almost certainly negative when markets have had grown more than 80% from their original value.
What: “Gain” is the amount in dollars one’s investment would change from the initial USD 100 invested. Investment is divided equally between Dow Jones Industrial Average and Nasdaq Composite indices. When: Monthly data between February 1985 and April 2020 Source: investing.com
One dot represents one moment in time between February 1985 and April 2020. So, if you sense, that after 6 months the price of stocks will be lower than today, it might be a good idea to start buying gold. Based on historical data, it will probably end up gaining you positive returns. Whereas oil gains are not that consistent.
This tiny analysis of scatterplots shows that gold is a safe-haven investment and oil is not so.
What: “Gain” is the amount one’s investment would change if USD 100 were invested six months ago. Stock is made from Dow Jones Industrial Average and Nasdaq Composite indices. Oil is represented by Crude Oil. When: Monthly data between February 1985 and April 2020 Source: investing.com
I believe you’ve heard about “Europe of two speeds”. But to understand whether those two speeds are really different we need to compare it to something. I picked two options – one is ASEAN, an organisation in Southeast Asia that promotes integration in economic, political and other fields. Another one is the USA and its states.
I’m comparing two core measures – GDP per capita and population. Boxplots at the bottom and the right side of the chart show us that the USA is a highly homogenous entity compared to the other two. If we look at population only, there seems to be a lot of variety in ASEAN, however, there are only 10 countries with one clear outlier – Indonesia. This country is not encircled in the scatterplot, and the encircling ellipses of the EU and ASEAN have quite similar widths. EU just has way more small countries.
Checking the GDP per capita gives a clear view of the diversity of the EU. If the two richest ASEAN countries are excluded, it becomes very homogenous – all the other countries are on the poor side.
Conclusion: EU is diverse even compared to Asian standards.
What: Population and GDP per capita in current USD (for ASEAN and EU) and GDP per capita in chained 2012 USD (for the USA). I believe this inconsistency is of minor influence since the diversity inside the group is what matters – comparisons of states and countries should not be made. When: 2018, except Population of the USA which is an estimate for 2019 Where: Countries of EU and ASEAN as well as states of the USA. Source: WB + BEA and USCB for USA states
What: indicated on the charts. Healthy life expectancy (HALE) is used for calculations. HALE is a form of health expectancy that applies disability weights to health states to compute the equivalent number of years of good health that a newborn can expect. When: all charts are 2017, except the last one which is 2015 because this is the latest data for HALE. Where: 189 countries and territories of the world. Source: FAO.
After debunking “America is the country of freedom” myth, I tried to debunk “Thailand is the country of smiles” myth. As it happens, Gallup, while doing research for their emotional indices asked people did they smile or laugh yesterday. And this data reveals that Thailand indeed could be called the country of smiles – its result is among the best in the world, however, its poorer brother Laos does better on this list.
But the whole Southeast Asia is indeed the region of smiles!
By the way, where is the secret of Nigeria? Is it Nollywood?
What: Percentage of people who replied that they smiled or laughed yesterday on an interview on emotions. When: 2018 Where: 143 countries of the world Source: Gallup
As expected – no, there is a nice easily visible downward trend. It’s not the inefficiency of the USA making it one of the biggest polluters, it’s just the amount of production, while China has plenty of space to improve. There are many outliers above the general trend, and they’re mostly Middle East countries with oil plus one pink Brunei, also with oil and Estonia (probably with oil shale?) just beside Saudi Arabia.
What: CO2 emissions (kg per 2010 US$ of GDP) and GDP per capita. Colours mean regions by WB. When: 2014 for emissions, and 2018 for GDP. I did not match the time this time 🙁 Where: 187 countries of the world Source: WB
I was sure that I will get the obvious result again – more development will mean more safety. However, after cherrypicking some regions and drawing a trend line for each, I got the opposite result. Central Asia seems to follow exactly the opposite trend, and Latin America with Sub-Saharan Africa seems to be quite chaotic.
What: Law and Order (L&O) Index compared to Human Development Index (HDI) When: 2019 for L&O and 2017 for HDI Where: 63 countries from Central Asia, Sub-Saharan Africa, Latin America & Carribean, which have both indices. Source: Gallup for L&O and UNDP for HDI
After seeing Tajikistan and Azerbaijan among the safest countries I expected to see a U shaped distribution where both free countries and suppressed countries enjoy order and stability. However there is a clear line where freedom increases together with law and order, and many exceptions from the trend scattered around.
Also, many regional patterns are visible – blue Europe being at the top left corner, orange Africa and Middle East leaning towards bottom right, and green Latin America – towards bottom left.
What: Law & Order (L&O) Index compared to Human Freedom Index (HFI) When: L&O is 2019 and HFI is 2016, both are most recent indices available at the moment of making the graph Where: 135 countries of the world, that have both indices. For example, there is no Afghanistan on this graph because it does not have an HFI index calculated. Source: Gallup for L&O and “The Human Freedom Index 2018: A Global Measurement of Personal, Civil, and Economic Freedom”
The answer to whether economic opportunities cause society to diverge into “the rich” and “the poor” or to converge into a “strong middle class” remains unanswered, because only a slight negative trend is visible. If there is any effect of economic freedom on the distribution of income in a society, measurable by the GINI coefficient, then it is weak, and easily countered by various other effects.
What: GINI coefficient – the larger it is, the more equally is the income distributed, everyone having the same amount at 100, the smaller it is the more income is concentrated in hands of the few, only one person having all the wealth at 0. And Economic Freedom Index. When: The date of GINI is different for each country, the modal year being 2015. Economic Freedom Index is of 2017. Where: 138 countries of the world Source: WB for GINI and The Heritage Foundation for Economic Freedom Index.
There are few real communist regimes left around the world, and even those are not really communist. So, maybe democracy and economic freedom do not correlate well? Apparently, they do. Democracy and economic freedom go together!
What: Democracy Index and Economic Freedom Index When: 2018 for Democracy and 2019 for Economic Freedom Index, which covers years 2017-2018. Where: 162 countries of the world Source: EIU for Democracy Index and The Heritage Foundation for Economic Freedom Index
After comparing the happiness score and Human Freedom Index it could be said that probably yes. The correlation is 63%, so we might say that people in freer countries consider themselves happier.
What: Happiness score from World Happiness Report and Human Freedom Index When: 2016 for Freedom and 2017 for Happiness. Where: 147 countries of the world Source: WHR and The Human Freedom Index 2018: A Global Measurement of Personal, Civil, and Economic Freedom
There is such Human Freedom Index, covering a wide range of areas including freedom of religion, freedom of movement, freedom to trade and many more. After plotting this index against the Democracy Index I saw a super clear relationship: democracy and freedom go together!
What: Human Freedom Index and Democracy Index When: 2016 Where: 157 countries of the world Source: EIU for Democracy Index and Ian Vásquez and Tanja Porčnik, The Human Freedom Index 2018: A Global Measurement of Personal, Civil, and Economic Freedom (Washington: Cato Institute, Fraser Institute, and the Friedrich Naumann Foundation for Freedom, 2018).
Let’s say Human Development Index indicates this “betterness” of life, and the Democracy Index indicates how democratic a country is. Then it is visible, that only democraciest democracies show a positive trend. Countries below score of 6 lose that clear correlation, because some countries managed to provide good living conditions for their citizens without being democratic. Most of them have oil.
What: Human Development Index (HDI) and Democracy Index When: 2017 Where: 165 countries of the world Source: UNDP for HDI and EIU for Democracy Index
It seems like it’s the opposite. Maybe the less sun people have, the more they work to survive, the more developed they become and thus – more happy.
African countries have been made dim in this graph because they show less clear relationships – in the Sub-Saharan region, they all occupy the bottom part of the happiness chart, in the Middle East & North Africa, they occupy just a narrow band in the sunshine spectrum.
What: Happiness score from World Happiness Report and Yearly sunshine hours. Since it’s impossible to calculate sunshine hours for the whole country which might be as diverse as the USA with Florida and Alaska, a simple average of available cities was calculated. When: 2019 Where: Countries that have both statistics. Western & European countries include Europe, USA, Canada, Australia and New Zealand. Source: WHR and W: https://en.wikipedia.org/wiki/List_of_cities_by_sunshine_duration
As we can see, it clearly is. The more developed the country, the more people are happy about living in it. But this particular index of happiness does not measure daily emotional experience, so, this “happiness” is not about being euphoric and excited, it’s more about overall reflection on life. Then it makes sense, that being healthy, literate and having money makes a person happy.
What: Human Development Index compared to Happiness score from World Happiness Report When: 2017 Where: Countries that have both statistics. Source: WHR and UNDP