Prepare, don't predict: The folly of investment forecasting

Research should be at the core of all investment processes

clock • 4 min read

The investing environment is inherently unpredictable but, writes Mike Coop, we can use the traits of so-called ‘super forecasters’ to build diverse portfolios which capture opportunities and help keep investors on track towards their goals...

Nothing is certain when it comes to investing. Just like life, everything in investing occurs within a range of possible outcomes. Some of these outcomes might appear more likely than others but actual, accurate forecasting is both incredibly difficult and unreliable. Taking a brief look at just some of the recent market shocks and current trends highlights how hard it is to make accurate predictions. We are currently experiencing a once-in-a-generation rise in interest rates, the impact of which will take a long time to work through. While rate rises were certainly higher in the late 19...

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