The Market-Timing Myth
David Kathman of Morningstar.com recently offered:
“Naturally, every investor would like to know what the market is going to do. But world financial markets are incredibly complex systems, with millions of people all trying to gain an edge. Lots of those people try to predict where the market (or various segments of the market) will go…the records of prognosticators…on the whole, pretty terrible. William A. Sherden’s 1998 book The Fortune Sellers goes through a grim litany of studies and anecdotes that illustrate what a bad job even the “experts” have historically done at predicting economic and market trends. The experts who most accurately predict inflation or interest rates one quarter are just as likely to be among the least accurate the next quarter. Elaine Garzarelli made her reputation by predicting the 1987 stock market crash, but then made a string of wrong market predictions over the next decade.”
Wise wisdom? Of course. Do people follow it? Not exactly!
