Quote:
Originally Posted by Tom '74 911
I was talking to my financial person at the beginning of the year and she confided that the partners in the firm play a little game at the beginning of every year where everyone writes down how they think the year will go, what will happen in the markets, what stocks and investments will be good and what will be bad... and that they had just had their year-end meeting to discuss 2017. NOT ONE PARTNER was correct in their predictions.
So, either everyone in the firm is a complete bonehead (which is not the case) or really, no one can predict the future - imagine that.
As boring as it sounds, it's really hard to beat a market based index fund.
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Years ago, the Wall Street Journal used to run a contest where a bunch of financial professionals ran pretend portfolios. They were judged against the DJIA and a "dartboard" portfolio--a portfolio that was literally constructed by throwing darts at pages of the Wall Street Journal and pretending to buy whatever stock the darts landed in. Almost every year, the dartboard portfolio beat the professionals and the DJIA beat the dartboard. What I took from this is that you were usually better off buying a random assortment of stocks than listening to the professionals, and almost always better off in an index fund than with a random assortment. The feature was discontinued after a few years because it tended to reflect poorly on financial professionals, who were the bulk of subscribers.
Another thing to consider about financial professionals is that many make a career of being right, once. How many adds have you heard about "so-and-so, who correctly predicted the market crash in 2001" (or 2008, or 1929--you get the point)? I have friends in the industry, and it isn't so much that the person was right, but that they made a whole bunch of outlandish bets with their client's money and one of them happened to pan out. You can peddle the "being right" thing for about ten years and attract all sorts of money as an "expert". This means there is huge incentive to make predictions (once again, with other people's money) that are unique from everyone else's predictions.