Can Experts Make Market Predictions? Does Market Timing Work?
Timing financial markets is a very seductive thing. It seems like we should be able to do it. Of course, the reality is timing financial markets is a fool’s errand. We get lucky once in a while, but the cost of being wrong is often fatal.
What about the so-called financial experts? They have resources, credentials and experience far beyond those of the average person. Surely, their predictions must be useful and profitable. Alas, the evidence shows that financial experts are poor at making predictions.
And even if their prediction about world or corporate events is accurate, how useful is it when one tries to execute investment decisions. Once again, the value of long-term predictions is not very useful according to one recent study by Jim Davis.
Finally, at the end of the program, I spend some time discussing the Financial Security Index and what people are thinking about retirement. Unfortunately, it looks like we all have more work to do!
I hope you enjoy this week’s program.