Invest Smarter: Improve your odds of success
Sources: RockWealth LLP; Regis Media; Robin Powell.
The vast majority of forecastors have very poor track records. So, if even the professionals can’t predict a crash with any accuracy, why fool yourself into thinking that YOU can? Crashes will happen. But no one knows when. What’s the point of worrying if you can’t do anything about it?
Featuring Eugene Fama, PhD Nobel laureate, Director, and Consultant, Dimensional Fund Advsiors | Jake DeKinder Head of Client Communications and Vice President, Dimensional Fund Advisors
By Dan Solin
DanielSolin.com
This woman is an economist. She’s very well-educated. She’s comfortable predicting when the next recession will occur. This is a coin. It’s very dumb. Should you rely on the prediction of the economist or the toss of a coin? The answer seems obvious, but it isn’t. From 1990-2012, economists correctly forecast only two of 60 recessions that occurred around the world a year in advance. Flipping a coin probably would have done better. No one has the expertise to consistently predict the direction of the market. Keep this in mind the next time a super-confident pundit makes a prediction. A dumb coin toss is likely to be more accurate.
