My New Year Predictions and YOU

6

A year ago I made predictions about the upcoming year. I didn’t try to predict the end of the world, like the Mayans, I just shared some thoughts about how the economy and stock market would fare.  But, I found out, as many folks do, predictions about future events is not a easy thing to do.  Now, I get a big kick out of reading and listening to folks pontificate on future events.

 One of my favorites is a “financial expert” who writes bi-monthly columns for my local newspaper.  He is pretty funny really.  His political and economic views, which he always points out to the readers, are way out of the mainstream.  Last year at this time he predicted there was an 80% chance of the major stock indexes dropping 40-60%.  He gave all the reasons he believed this would happen.  Actually he has been predicting this major drop since 2009 when he started writing this column.  Been wrong a lot!  This past fall he became a political prognosticator by predicting a Romney double digit win with a electoral landslide.  At least he is consistent!

This year I thought I would post my rules of prognostication first:

  1. Occasionally someone will get a prediction correct. It is foolish to start believing they are going to be right again anytime soon;
  2. Anyone who thinks they can accurately predict future events, especially in the short run, is a fool;
  3. Anyone who believes some “experts” predictions about future events, especially in the short run, is a bigger fool;
  4. Anyone who plans their future based on an unusual event happening, especially in the short run, is the biggest fool of all; and finally
  5. Predictions are fun to do and consume – don’t take mine too seriously!

My Predictions:

  • A continuing political stalemate will give the media something to talk about all year;
  • Taxes will go up for the wealthy who don’t have good tax attorneys;
  • The world economy, despite some unforeseen negative events, will continue to improve sloooowly;
  • Real Estate will continue a slow uphill climb;
  • Stock indexes will end up higher at the end of the year;
  • And finally, for those that take their retirement into their own hands, 2013 will be a wonderful year!

What are your predictions for the new year? Leave a comment below to let me know!

Thanks for reading and Happy New Year!

Photo: Mark Weaver

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6 Comments

  1. Predictions:
    1. your local newspaper columnist will still have his job – as will the local weather reporters who are also usually wrong
    2. I will continue to be amazed that people at all the Fox and CNN affiliates are able to keep their jobs without the need for accuracy or credibility
    3. real estate values will continue to climb sloooowly
    4. more taxes will be paid by EVERYONE who isn’t structured properly and doesn’t use a good tax attorney
    5. our real estate business will continue its boom trajectory
    6. even more people will want to get into the world of real estate investing as we lead the economic recovery

    Thanks for your post and I am looking forward to a FABULOUS 2013!

  2. 1. My real estate portfolio will do better than the funds locked up in my company 401k.
    2. My net worth will rise since most of retirements are no longer in mutual funds.
    3. My actual tax bill will be lower than my projected tax liability.

  3. I’ve learn that when making economic predictions, give a number or give a date. NEVER give both.

    My predictions:
    The Fed’s Quantitative Easing will end.
    The Stock Market will reach new all time highs.
    Various real estate markets will recover in 2013

    On a lighter note, some team will win the Super Bowl, NBA championship and World Series. No team will win the Stanley Cup.

  4. In reading “Where are the customer’s yachts?”, there was a neat scenario posed by the author. Imagine 100,000 people are given a quarter. Everyone predicts which side it will land on and then flips it. Statistically, half of the people wil be wrong, and are cut out from the next round. Next round, 50,000 people are left. They do the same thing. Half of the people are wrong, now leaving us with 25,000. Rinse, repeat, and after about eight rounds, there are now less than 400 people left. These people would surely be giving tips on how they flipped, their tactics, anything as long as someone else will listen, when the only thing we are observing is survivorship bias. No one had any tricks.

    Many financial advisors are blind to this, and don’t realize their tips they provide on mutual funds can be highly skewed because of this.

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