If, like me, you share an avid interest in economies and their stock markets, you may also have a tendency to read a wealth of economic comment and analysis.
The vast majority of those who write do so intelligently and interestingly on all aspects of the economy. Inevitably, their views will differ markedly from the downright bearish to the absurdly over-optimistic.
Personally, I am generally inclined to plump for the middle ground. In the main it proves a reasonable course of action given nobody actually has the ability to read the future. Translate this into your investment portfolio and this means opting for a diverse mix of funds, each suiting a variety of market conditions.
Now some will call this sitting on the fence. On the other hand, I occasionally think I would prefer to be either super-cautious or super-bullish. For one thing, it would make portfolio planning a whole lot easier. One reason I am not is that I find many of the thought-provoking articles I read often turn out to be wrong.
Just cast your mind back five years to the financial crisis; even when markets reached a low point in March 2009, plenty of well-known commentators suggested they would fall further. The markets proved them wrong and proceeded to climb the wall of worry. Indeed, in the UK the FTSE 100 has since seen gains of more than 100 per cent while the small (FTSE Small ex IT) and mid-cap (FTSE 250 ex IT) indices have each grown by over 200 per cent.
I previously dubbed this the "impossible rally" – given the headwinds, including economic and political concerns, one might have expected an alternative result, as many investors and commentators did to their cost. Many assumed a state of cautiousness following the crisis, either holding high levels of cash, standing by as rates on cash deposits fell further, or making defensive investments.
Interestingly, the bearish case often seems to have greater intellectual value. This might be due to the fact that those who tend to be more optimistic within the industry often have their successes tied to the fortunes of the stock market. Consequently, few people listen to the optimistic case, expecting it to be inherently wrong. Equally, it is quite difficult to keep investors in a stock market where there are constant worries over an economic collapse.
Presently, it would be easy to construct a bear case. The developed world remains deep in debt, while markets have been driven by a powerful cocktail of record low interest rates and quantitative easing (QE). These measures have supported financial assets, such as shares and property, just as politicians and central bankers hoped.
Perhaps the time to worry is when we see a withdrawal of this support in the form of a reversal of QE and rising interest rates. We experienced the potential effect of such a move back in May when Ben Bernanke, chairman of the US Federal Reserve, suggested tapering off QE. The bears immediately latched on, believing an Armageddon scenario was imminent, only to see this dashed by Mr Bernanke's change of mind a few months later.
My feeling is if anyone can tell you exactly what's going on in the economy and be sure of the outcome they are most likely completely clueless. I believe the real answer is we are in the greatest financial experiment of our time, with no one knowing quite how it will end.
So what does this mean for private investors? In my view, the events of the past five years present a clear case for investing in a blend of funds in keeping with both sides of the argument. Hold these alongside a good dose of cash, vital for emergencies, as well as to pounce on new opportunities.
Now this might all sound quite mundane. Yet ultimately, from my experience, odds are you will do far better this way than attempting to run a portfolio from trying to predict wider economic events and their consequences.
Mark Dampier is head of research at Hargreaves Lansdown, the asset manager, financial advisor and stockbroker. For more details about the funds included in this column, visit hl.co.uk/independentReuse content