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The Economic Forecasting Chart of Shame

An article published in Investment Executive this week highlighted "causes for concern" when looking at recent economic data.  The culprit these days is tariffs and trade wars, and the financial media has taken that ball and is running hard down field with it.  When I read this article I come back to a simple idea.

Market forecasting is difficult bordering on impossible


There isn't a lot of evidence that suggests that markets can be timed or forecast using economic indicators.  I don't mean to pick on anybody, but if you check the track record of most economists and market forecasters you'll see that they are wildly inaccurate and inconsistent.   To illustrate, below is a chart featuring forecasts from some notable market forecasters and fund managers while the 10 year long bull market in US stocks has been continuing.  If you had gotten out of the market based on any of these prognostications, you likely aren't happy about it now.  This chart is from Marketwatch.

So, if you are reading newstories forecasting markets based on economic indicators, keep in mind that their reliability is about the same odds as flipping a coin.

Photo by Yeshi Kangrang on Unsplash

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The information in this material is not intended as investment, tax, or legal advice.  Please consult your advisor or tax professionals.