"I can't predict the future, and I don't have respect for people who try to"- As I have written here numerous times, my mother of blessed memory was fond of the saying, "Prophecy was given to fools." We have a hard enough time trying predict the weather next week, let alone the winner of the Piston Cup fictional car race between The King,
Nonetheless, for some reason when January rolls around, "experts" in fields ranging from politics, sports, music and a host of other things are trotted out to make their forecast for the upcoming year. It goes without saying that plenty of experts also give their "professional" prediction of what will happen to the financial markets as well. In the words of
If we actually go back and check expert predictions from a year ago, you will see how correct my mother was.
It's easy for me to sit back and cherry-pick bad market calls. But new research is out showing that you would be better off flipping a coin to make a market prediction than listen to a talking head.
I often get calls from clients asking me what is going to happen to the market over the next two to three months. I generally answer that I have no idea, but that if you give me three to five YEARS, the market should be higher than its current level. The old cliche about not timing the market, but time in the market, is shown to be accurate time and time again.
No one can continually successfully predict market movements. There used to be an old sales technique used by unscrupulous stock brokers. They would send out a stock prediction to 100 prospects, half to buy the stock and half to sell it. For the 50 prospects who were sent the correct prediction, they would do the same thing, and then do it again to the 25 with the correct recommendations. At the end of the day there were 12 prospects who were correctly sent a recommendation three times in a row. The broker would then call them and brag about how great his forecasts are and that it would be smart to open an account with him.
The best way to build your wealth is by correctly allocating your portfolio and rebalancing it from time to time. Leave market prophecy to the fools.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of
"I can't predict the future, and I don't have respect for people who try to"-
As I have written here numerous times, my mother of blessed memory was fond of the saying, "Prophecy was given to fools." We have a hard enough time trying predict the weather next week, let alone the winner of the Piston Cup fictional car race between The King,