Never Ever Believe a Market Forecast

Never Ever Believe a Market Forecast

One of our favorite pastimes as an industry is forecasting the future. Whether it be stock prices, the economy, or the direction of interest rates, every year, economists put out their projections, while the rest of us wait in anticipation. As we’ve argued before on this blog, market forecasts are essentially useless and cause more harm than good. We thought this chart from Societe Generale captured our thoughts nicely.

Economic forecasts are almost always in a tight range, while actual growth in the economy tends to have massive swings up and down.  Economists tend to either massively under or over-shoot the actual results.  Next time you find yourself listening to an economic prediction for anything other than pure amusement, please come back and review this chart.

Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.

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