Every December investors are inundated by the financial media and investment industry with their stock market predictions for the coming year. As bad as these predictions are, they pale in comparison to their predictions during the years when the stock market suffered its largest losses and earned its largest gains. The cold hard truth is that stock market forecasts and predictions are nothing more than a marketing gimmick designed to attract new viewers, listeners or clients.
Key Takeaways:
- Making investment decisions based on these ridiculous claims is one of the most dangerous things an investor can do.
- Numerous studies show that the predictions of the stock market pundits are wrong more often than they are right.
- The accompanying chart shows the stock market predictions of money managers and stock analysts employed by some of the largest investment firms in the country including; JP Morgan, Goldman Sachs, CitiGroup and Morgan Stanley from 2000 to 2016.
“Making investment decisions based on these ridiculous claims is one of the most dangerous things an investor can do. Numerous studies show that the predictions of the stock market pundits are wrong more often than they are right.”
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