Why you have to watch those tricky economists!!!!!

July 29, 2009

holdworld_tns  MATHS IN THE REAL WORLD

which is everywhere!!!! log graph 2 Correction

Economists may not set out to mislead the public, but they do produce graphs that can easily be misread. Here is a graph from AMP (again) published in THE  AUSTRALIAN  on 29/7/09 (p12 . Wealth supplement.).

Have a look at the graph. What’s wrong with it?????????????

Mathspig Maths Mystery Box 1 graphFirstly, you cannot invest money in 1928. To be relevant to you, start looking at the graph when you first had money to invest. 1999? 2008?

Secondly, look at the Y-axis scale. This is NOT a LINEAR graph. This is a logarithmic scale. That little blip drop in Australian Shares value at the end is worth $331,375!!!!!  If you had $1,000,000 (Just retired, for instance) and put your money in shares in October 2007 that is how much money you would have LOST.

Here is a liner graph showing clearly (and more honestly) the drop in the All Ordinaries Index in the Australian Share Market during the GFC. The graph came from Sharewatch.

Mathspig Maths Mystery Box 1 graph 2

One comment

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