Prediction Season is Here
Periodically Dimensional offers some guidance and reminders that those who publish news are not fiduciaries and their chief concern is to sell “news,” get eyeballs on their pages, and generate a profit for themselves. They do not have your best interest in mind.
Here are some good reminders from their Prediction Season December publication:
- Predictions about future price movements come in all shapes and sizes, but most of them tempt the investor into playing a game of outguessing the market.
- “You make more money selling advice than following it. It’s one of the things we count on in the magazine business—along with the short memory of our readers.”
- The track record of professional money managers attempting to profit from mispricing also suggests that making frequent investment changes based on market calls may be more harmful than helpful.
- Those who make changes to a long-term investment strategy based on short-term noise and predictions may be disappointed by the outcome.
Even as the markets near new highs, current prices remain reasonable given historical averages of prices, earnings, and inflation. Let’s remain disciplined and look forward to a good year.
Be well, Dan