Labor Day Thoughts on Stewarding Your Capital

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):





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.

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