Markets have a way of confounding your expectations. I have found that a better option is to stay broadly diversified and with some help, set an asset allocation that matches your own risk appetite, goals, and circumstances. This has worked for me and our clients for many years.
Of course, this approach doesn’t stop you or anyone else from having or expressing an opinion about the future. We are all free to speculate about what might happen in the economy and markets. The danger comes when you base your investment strategy on such opinions. In the meantime, if you insist on following forecasts, here is a list of ten predictions you can count on coming true in 2017:
- The markets will go up some of the time and down some of the time.
- There will be unexpected news. Some of this will move prices.
- Acres of newsprint will be devoted to the likely path of interest rates.
- Acres more will speculate on China’s growth outlook.
- TV pundits will frequently and loudly debate short-term market direction.
- Some economies will strengthen. Others will weaken. These change year to year.
- Some companies will prosper. Others will falter. These change year to year.
- Parts of your portfolio will do better than other parts. We don’t know which.
- A new book will say that the rules no longer work and that everything has changed.
- Another new book will say that nothing has changed and that the old rules still apply.
The future is always uncertain. There are always unexpected events. Some will turn out worse than you expect, while others will turn out better. The only sustainable approach to that uncertainty is to focus on what you can control.