In her first contribution to the Thursday Night Insight series, Research Executive Bianca Boey looks at why market trends can often give us a good indication of future behaviour.
‘Recession’, ‘Credit Crunch’, ‘House Price Crash’. These are all terms that have become a regular part of our vocabulary in reflection of our current economic situation. The global economy is declining daily and affecting everyone and everything within its reach. You can not turn on the television or leave your house without being bombarded in some way by reminders of our economic crisis, whether it is hearing about another company going bust or news of MPs misusing expenses to have their moats cleared whilst the rest of the nation is struggling to get by.
So, imagine my surprise when I went out last weekend and was faced with a setting where the recession did not even seem to exist. I had entered a modern day Shangri-La where I was surrounded by Armani, Gucci and Prada! This magical place that I had stumbled upon is the trendy village of Alderley Edge, one point of Cheshire’s ‘Golden Triangle’ which consists of Alderley Edge, Wilmslow and Prestbury. Just down the road from B2B International’s Manchester offices, the ‘Golden Triangle’ is home to many Manchester United and City football players as well as various celebrities and wealthy businessmen. There are more millionaires per square mile here than anywhere else in Britain and women flock from all over the North in the hope of ‘bagging’ a footballer (I know what you are thinking and no, that is not the reason that I was there…) and being accepted in to this recession-free society.
As I sipped my modest glass of Pinot Grigio and watched the scantily clad girls with bleached blonde hair pouting from behind a bottle of Cristal whilst keeping an eagle eye out for the presence of any footballers, I found myself asking, what exactly is shielding the ‘Golden Triangle’ from the credit crunch?
Yes the area is idyllic, surrounded by countryside, boasting results-topping schools and filled with history and culture, but does this explain why it has remained so unscathed? Apart from the clear presence of affluence in the area, I can not answer the question of why this haven is able to turn its expensively reconstructed nose up at our current downturn and also at other economic crises in the past. If we look further back to the last house price crash in the late 1980s/early 1990s, we can see that the ‘Golden Triangle’ yet again fared this crisis well, with property value here remaining high whilst elsewhere in Britain houses were slipping in to negative equity. Maybe the question I should be asking is not why this has happened, but how can we utilise this knowledge?
Ok, I admit that it would be rather flippant of me to suggest that we all cope with the house price crash by jumping in to our Bentleys and taking our spare million to the ‘Golden Triangle’ to purchase a house next door to Cristiano Ronaldo. Obviously, unless you are one of the few incredibly wealthy members of society, this is not possible! However, if we consider the implications of this in a wider sense, we can see the importance of being aware of and analysing both past and current trends before making any significant decisions or predicting future developments. The house prices in the ‘Golden Triangle’ maintained value in the past crisis and so far they have continued on in this way in the current crisis. This clearly suggests that in a similar future situation house prices here will continue to remain steady and therefore we can predict that this is one of the safest places in the UK to invest in property. This theory applies in the business world as well, and it is vital for companies to research and become aware of market trends and changes in order to release the right products, at the right time, in the right place and market them in the best way possible.
I know that I will definitely be making sure that I have done my research into past and current market trends before making any important investments or decisions in the future – unless, of course, I do succeed in ‘bagging’ myself a footballer!
