Conflicting signals need competing explanations.

Markets can send several signals without telling one clear story.

Bond yields fall.

Share prices fall.

Gold barely moves.

You look for an explanation that connects everything.

I understand the temptation. A coherent story makes uncertainty feel more manageable.

A persuasive narrative is not yet evidence

Robert Shiller, the Nobel laureate in economics, explores how popular stories influence economic behaviour in his work on narrative economics.

His work gives me a reason to pause before accepting an explanation simply because it sounds convincing.

Separate the observation from the explanation

“Bond yields fell” is an observation.

“Investors are expecting a recession” is one possible explanation.

Yields could also fall because inflation expectations are easing.

The price movement alone cannot tell me which explanation deserves more weight.

Different markets do not owe me one story

Different markets reflect people with different expectations, obligations and time horizons. Their decisions do not have to produce one consistent message.

Return to the decision

You can spend hours explaining the market without discovering anything that should change your decision.

I want to understand whether new evidence changes my reasons for holding an investment, the risks I can afford or the time I have available.

When signals conflict, I need to leave room for more than one explanation.

My confidence should grow as the evidence strengthens.