Wall Street analysts were unusually pessimistic as the year began. Should we have been surprised? Probably not. Recession forecasts were all the rage as the year began.
A recent story in Bloomberg News points this out. In fact, since 2000, analysts had not forecast a down year until 2023.
Despite earlier concerns, the economy has held up well this year, and major indices such as the S&P 500 Index are heading into yearend in positive territory.
Notably, analysts failed to call down years, including 2000, 2001, 2002, 2008, 2018, and 2022.
Partly cloudy with a big chance of uncertainty
Predicting the economy and the stock market can be challenging. It is not a straightforward process. Models rely on many variables. Get some of the variables wrong and the forecast can go awry.
We can learn plenty of lessons from this year’s missteps by the pros. But let’s keep it simple.
Successful long-term investors avoid shortcuts. Market timers take shortcuts. Avoid shortcuts.
