Is there any phrase in the title of an article or a speech that signals useless content with higher probability than “Market Outlook”? No doubt clever readers could come up with some worse phrases. Hopefully, I’m not adding to the poor track record of “Market Outlook” with this brief article.
People worry about the future of their investments, their jobs, and the interest rate on their debts. When someone promises to predict the future, people listen. It doesn’t seem to matter that so many previous prophets got it all wrong; people listen to the next one anyway.
We’re wired to see patterns. The sun comes up each morning at a predictable time, and we expect this to continue. The problem is that we see patterns that aren’t there as well. When gamblers start winning money at a craps table, they think they’re on a “heater” and start betting more. But this is a case where patterns don’t really exist; past dice rolls tell you nothing about the future.
The movements of planets and stars are very predictable, but the economy and stock prices are not. If stock prices were predictable, then investors would already know which stocks are destined to rise, and they would have bid up their prices already.
The only way to get an edge is to know something that other people don’t know. Do you really think the market outlook section of your investment newsletter is going to tell you something that nobody else knows? Not likely.
I see little point in reading anything that starts with “Market Outlook” ... unless I wrote it :-)