Take a look at this chart:
It’s been another hard year for prophets of doom. The chart above covers doomsday market predictions from 2012 to 2018, overlayed about the movement of the S&P 500 during those same years. The list below below takes you, should you want to go there, into articles on some of these predictions from 2015 to 2018. It fascinates me why doom is so much more gripping to the human mind than predictions of good times or even calm ahead. Horror movies sell; the Waltons not so much. Our brains are wired for fear more than they are for joy, peace or calm.
Even though some markets have suffered minor corrections (and there are still four months to go!), in most cases broad-market indices in first-world nations are either up or not far from their levels in January. Here are some recent doomsday predictions (note that the author of the blog or article is not always the one making the prediction):
- [1 Mar 2015] Stock-market crash of 2016: The countdown begins
- [17 May 2015] Countdown to the stock-market Crash of 2016 is ticking louder
- [1 Jul 2015] Recession time bomb ticking faster, louder
- [17 Aug 2015] One big question: Will stocks lose $10 trillion in 2015 or in 2016?
- [24 Aug 2015] Dow 5,000? Yes, it could happen
- [18 Sep 2015] Brace for the worst week of the year
- [5 Sep 2015] 100% risk of a 50% stock crash if Donald Trump wins nomination
- [30 Sep 2015] Billionaire Carl Icahn warns of ‘danger ahead’ for U.S. economy
- [12 Jan 2016] ‘Sell everything,’ [RBS] tells investors and brace for ‘cataclysmic year’
- [29 Jul 2016] ‘Sell everything,’ DoubleLine’s Gundlach says
- [8 May 2016] For Stan Druckenmiller This Is “The Endgame”
- [9 Jun 2016] Investing legend George Soros returns to trading — and he’s battening down the hatches
- [9 Aug 2016] Marc Faber: S&P is set to crash 50%, giving back 5 years of gains
- [9 Nov 2016] Paul Krugman: “So we are very probably looking at a global recession, with no end in sight.”
- [14 Jun 2017] Harry Dent: ‘Once-in-a-Lifetime’ Crash Coming in Next 3 Years
- [24 Jun 2017] It’s going to end ‘extremely badly,’ with stocks set to plummet 40% or more, warns Marc ‘Dr. Doom’ Faber
- [20 Aug 2017] Ron Paul: 50% stock market plunge ‘conceivable,’ but it’s not President Trump’s fault
- [30 Aug 2017] 70% Stock Market Crash to Strike September 1, Economist Warns
- [17 Oct 2017] A Major Stock Market Correction Is Coming: Dr. Doom Marc Faber
- [9 Feb 2018] Jim Rogers says the next bear market will be ‘the worst in our lifetime’
- [6 Apr 2018] Guggenheim investment chief sees a recession and a 40% plunge in stocks ahead
- [11 Apr 2018] All this volatility is following one bear’s script for a 60% tumble in the stock market
- [31 Jul 2018] This ‘prophet of doom’ predicts stock market will plunge more than 50%
In general, the record of market forecasters is rather dismal, to say the least. A recent study of 68 forecasters found that their average accuracy, according to some very specific criteria and weights, was only 48%; in other words, slightly less than flipping a coin. And they charge for their advice, too.
Please understand, my friends, this post is not a promise, a prediction, or even a suggestion that markets will keep going up. Not at all. Corrects are coming, and bear markets will return one day. But, I don’t see them yet and, as I say, our brains seem to be drawn more to the fearful outcome than to the hopeful. We can’t keep the bad case from ultimately coming, but we can prepare for the inevitable downdraft by investing our retirement money sensibly: in other words, in low-cost index funds, in a wide array of asset classes, and by avoiding trying to time the market’s ups and downs.