It’s that time of year again when investors are bombarded with annual market forecasts.
This is going to go up; that’s going to go down. Buy this; sell that. And, of course, the one forecast that remains constant (and almost invariably wrong) — the next 12 months will be a stock picker’s market, in which only those who pay for top fund managers who really know what they’re doing will succeed.
Why are there so many forecasts? Because Christmas and New Year is traditionally when we reassess our lives, evaluate the past 12 months and plan for the year ahead — and that often includes reviewing our investment portfolios.
The media knows this (besides, how else are they going to fill all those pages when the markets are closed?) and, more to the point, so does the fund industry. It knows that the more predictions it makes, the more we’re going to turn our portfolios over. And the more we do that, the more fees the industry earns.
And are these forecasts accurate? You’re having a laugh. This excellent post by Cullen Roche explains all you need to know about annual market forecasts, and why the only reason for reading them is for their comedy value:
Assessing the utility of Wall Street’s annual forecasts
(Featured image: Richard Foster)
Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.
