…To (Hopefully) Ignore All 2015 Forecasts – Even From Me!
The Folly of Forecasting
“It’s far better having an approximate answer to the right question, than an exact answer to the wrong question.”
~John Tukey
Truth be told you will not find me posting out a 2015 Forecast of stock prices and interest rate moves. Why? There is a greater than good chance it will be wrong!
For example, who predicted US, German and Japanese bond yields would FALL in 2014 according to the Bloomberg Poll of Economist? None.
Of course, we all make forecasts in the investment business. Anyone who takes a directional bias in any investment portfolio is making a forecast whether they know it or not.
How about this. History shows that domestic stock markets go up ~80% of the time over a 12-month time period. Thus chances are from January to December stocks will be higher.
However, do not be surprised by increased volatility in stock prices, especially over the near-term.
Finally, the CXO Advisory group gathered 6,582 predictions from 68 different investing gurus made between 1998 and 2012, and tracked the results of those predictions. There were some very well-known names in the sample, but the average guru accuracy was just 47%—worse than a coin toss. Of the 68 gurus, 42 had accuracy scores below 50%. Full stop!
“In the U.S., there is uncertainty about whether the Federal Reserve will continue to keep rates low…Europe is teetering on the brink of deflation, and individual countries differ on how to stimulate the economy.”
~Myron Scholes
Stay Tuned, Stay Hedged & Stay Patient! {TJM}
Disclosure
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