What makes for better television: Two market pundits arguing (maybe yelling) about what the future holds? Or those same commentators agreeing that they have no way to accurately predict the future, and any forecast they make is most likely a ‘wish’ or a ‘worry’? The former is admittedly better TV. The producer of any show would be more inclined to book a guest that can heighten emotion because that’s what makes for great television. If their mission was to educate, instead of capture attention, then the TV show wouldn’t have buttons to push that scream ‘BUY! BUY! BUY!’ or fancy graphics that jet across the screen. The format would be boring and dull because that’s what investing should be. If you want excitement, sit at a roulette table or bet on the Super Bowl (Go Kansas City!), but if you are investing your entire life savings in hopes you can retire someday or stay retired, it’s probably best to leave the emotion and guessing out of it.
The truth is that predicting the future is hard (Predicting the Future). Trying to time the market with quick trading strategies based on accurately predicting the future is more likely to underperform (More is Less) or trying to ‘pick’ a handful stocks that outperform is decidedly not in your favor (Most Stocks are Losers!). We think it is best to tune out the noise from the TV shows (Stay the Course) and stick to a long-term strategy that overweight’s areas of higher expected returns* (Manager Outperformance). For a more authentic and refreshing take on forecasting or predictions of the future, we compiled some short reading and a quick video from a $500+ billion asset manager, Dimensional Fund Advisors, so that you can hear what they have to say:
*Past performance is no guarantee of future results