Intelligence not a sign of wealth prospects
Published in Geelong Advertiser, July 2006
by Dale Gillham
It is ironic how many people believe that being smart will make you wealthy because supposedly the ‘smart’ people get the high paying jobs.
A study from the US, however, claims that being smart doesn’t make it more likely that you will be wealthy - it just means it’s more likely you will waste money.
Remember, there is considerable pressure placed on people in high paying jobs to maintain a particular status which often results in these people driving expensive cars, eating at expensive restaurants and sending their kids to private schools. All of which results in less money with which to invest in assets that create wealth.
The study conducted by Ohio State University confirms that people with below average IQ scores are just as likely to become wealthy as their smart counterparts. In fact, there was no coloration between an individuals IQ and their wealth as people with a high IQ are just as likely to get into financial difficulty as people with a below average IQ.
So the study confirms what I have always believed: ‘intelligence is not a factor for explaining wealth. Those with low intelligence should not believe they are handicapped, and those with high intelligence should not believe they have an advantage’.
So what’s happening on the market?
As I have previously mentioned, in times of uncertainty it is more practical to assess what we know rather than rely on what we think. And right now the market is moving sideways within a 4% price band.
What is interesting is that the market is unfolding in a rare sideways pattern; in fact it is so rare I cannot find an occurrence of it in the last 25 years. What I know from my studies, however, is that this pattern generally spells the end of a bull run, which is consistent with what I have been saying over the past few months.
The market has risen 3.5% in the last two weeks to be trading at the top edge of the sideways pattern; therefore it is possible we will see a breakout on the upside over the next week. However, as I have previously indicated, unless I see a strong move above the all time high I don’t believe the market can continue its bullish run in the short term.
If I am correct about the sideways pattern that is unfolding, I believe the market will fall away over the next week and possibly longer. Until we are certain about the direction of the market, it is far better to take a wait-and-see-attitude.
