Predicting the Market: Planning for the Unexpected
We all ask for them. We all seem to want them.
But how much do they help?
With the turn of the calendar into 2023, I’ve been asked at least a dozen times for some sort of prediction about the financial future.
These include queries for my thoughts on where inflation may go, how the stock market will perform, or if we will experience a recession this year.
To each and every one of these questions, my response is the same: I don’t know.
Of course, this doesn’t surprise people when I give it. We all realize we can’t forecast for certain what the future holds.
Yet, the urge is still there to make some sort of guess, educated or otherwise.
I’ll let the psychologists dig into what creates that desire, but I’ll take some time here to talk about what it means for financial decision making.
The truth is, your future is too important to make decisions based on guesswork.
Yes, we may all have assumptions or inclinations for what direction the year holds. It is vital to recognize that your and my best guess could be wrong, even wildly inaccurate.
Take this time in 2020 for example.
In late January of that year, while whispers of COVID were starting to surface, no one I knew was predicting a world-wide pandemic, lengthy quarantines, and a crazy good year in the stock market.
The point is, we have no idea what the future holds. This doesn’t mean we throw up our hands and make no plans.
Instead, I believe it is a sober reminder to make plans based on your life with contingencies for the worst case scenarios.
The people who have less stress and make better decisions when the hard times come are those who have planned for the unexpected.
If you don’t have a plan in place or would like to revisit it, feel free to schedule a time to talk with me. There is never any charge or commitment to see if I can help!