The financial media features market predictions by pundits with impressive sounding titles, like:
- Equity strategist
- Industry Insider
- Top investor
- Senior economist
- Institutional investor
Some of these people head up large departments at major banks. Others are on television so often you recognize their names.
Here’s the problem.
According to financial author, Larry Swedroe:
Accuracy isn’t important to investors. Confident talking heads is what they seek. Investors want a clear crystal ball. They want to believe that there’s someone out there who can protect them from bad things. Unfortunately, no such person exists.
Here’s what this means to you. See this adorable child?
If you asked her whether the stock market is likely to go up or down, or whether a particular stock is a “good buy,” her response is likely to be as accurate (or inaccurate) and these pundits.
Surprising, isn’t it?