Wednesday, 28 September 2016

Difficulties of predictions / forecasts

1. The 3 most important words for an investor are "I don't know."

2. Most investors make money because of things the decided 'not to do'; ignoring forecasts/predictions falls precisely into this.

3. Predictions/headlines attract eyeballs but repel returns

4. Past performance is no guarantee of future returns. In 2006, REITS gave a return of 36%, in 2007 a return of -17%. In 2007, emerging markets gave a return of 40%, in 2008 a return of -53%

5. In the last 15 years, only 17% equity and 7% bond fund managers have beaten their index as per Dimensional Fund Research.

6. Some retail investors enjoy predicting prices of commodities. Some trade oil using leveraged ETFs.

http://tonyisola.com/2016/09/who-knows-not-me/?curator=alphaideas&utm_source=alphaideas

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