What should you know?
A few years ago, the CXO Advisory Group tracked the public market forecasts of 68 ‘experts’ and ‘investment gurus’ over the course of a decade. There were over 6,500 predictions recorded.
The chart below shows the results of the study:
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- On average, the participants were only correct 46.9% of the time. Put another way, more than half the predictions were wrong.
- They all made some correct predictions, but none of them were accurate with any reliable consistency.
- The best ‘expert’ had a success rate of 68% and the worst only got it right 21% of the time.
- A coin toss would have provided a higher probability of success, than the combined `knowledge´ of all the experts involved.
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Why should you care?
Basing your investment decisions on market commentary and forecasts is a dangerous game.
The financial media is flooded with market predictions (guesses) on a daily basis. Most are short-term focussed and often have a vested interest, be it a commercial narrative or just to get more ‘clicks’.
The key thing to understand is that none of these predictions are aligned with your or your family’s financial goals, which is ultimately what matters most.
The only reliable route to success is to IGNORE THE NOISE from the media and stay invested in a diversified portfolio of the world’s leading companies for the long term.
