Investing With Clarity™ Blog

Year-End Perspectives and New Year Objectives

December 16, 2014 12:57:00 PM

As we head deeper into the holidays and approach the beginning of 2015, we start to see the talking heads of Wall Street handing out gifts by way of market predictions. As always, these predictions typically have a very short shelf life, similar to a carton of eggnog. Market forecasts typically expire in just a matter of months, weeks, or even days. This is due to unpredictable factors such as market volatility and low numbers from Black Friday shoppers, leading us to question why we even continue such a fruitless endeavor.ew

Like putting up your tree before Thanksgiving, there is nothing inherently wrong with making predictions insofar as you are trying to gain a little foresight, but in reality, relying on forecasts can prove quite dangerous and may well lead you off the Road to Nepsis™. When we become too reliant on forecasts we are being inflexible. Flexibility is what affords us the ability to ride through the snowstorms and steer clear of the moguls on the ski slopes of market volatility. Only the 4 Keys to Successful Investing will offer us true clarity, which serves us on the journey to Investing with Clarity™.

So as you unwrap your portfolio statements this holiday season, expect surprises. Just as the holiday music starts playing well before the actual holiday season, so too does the noise of the New Year's market predictions, just tune it out and stick to the knitting of investing with clarity.

Now, in the spirit of sticking to the knitting, let's take a look back at 2014's market predictions and see how we did, rather than looking too far ahead...

 

  • Most predictions on where the S&P 500 will end in 2014 will be wrong with the potential consequence of investors missing out on great opportunities!
  • Company stock prices will move up and down irrationally - As usual.
  • There will be opportunities to buy companies on sale - there always are!
  • Timing the market will continue to be very difficult - That's nothing new.
  • Focusing on short-term performance will distract investors from making intelligent long-term investment decisions - A tragedy for short-term thinkers.
  • Some investors will let their emotions get the best of them - And thank goodness, it's what provides opportunities on sale!
  • Investors will buy stocks that were op picks and sell them too soon, once again focusing on short-term returns.
  • Smart investors will view their investments like a business owner and continue to be patient with their investments - like us.
  • Stock market volatility will continue to scare investors while creating great investment opportunities - Like it always does.
  • Many investors will have focused on predictions and therefore be frustrated by predictions and that they were wrong.

 

We say it every year, It is not the predictions that make up a successful portfolio, it is the principles applied in investing which assist in having a successful portfolio! We find every year that the market moves in unpredictable manners, so remain flexible, make adjustments as needed, and remember that this is not a sprint, but a marathon.

Happy investing & Happy Holidays,
Mark Pearson

 

...Coming Soon: 2015's Market Predictions


Mark Pearson

Mark Pearson

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