Market Predictions: Up, Down or Sideways

I came across this article over the weekend in The New York Times, Clueless About 2020, Wall Street Forecasters Are at It Again for 2021. It hits the nail on the head when it comes to market predictions. Even the smartest analysts in the industry have a hard time predicting market returns. Despite the anomaly that 2020 has been, previous years have been no different when it comes to the predictions that “expert” analysts make at the beginning of each year. Sure, one or two of them may get it right (guess it right) once in a blue moon, but investing on the “once in a whiles” is not a strategy. Time and again, diversification has proven to be a sound strategy, as long as an investor is willing to stick with it through thick and thin. Pick the level of risk you’re willing to take at the outset, truly understand the potential upside and downside scenarios, then execute and stay the course. Here’s a reminder on what diversification means: