2020 is getting closer and it’s almost impossible to avoid hearing “expert” predictions for the stock market and our economy as a whole. If you are plugged into the investment scene at all, then there’s no doubt you’ve already heard plenty of prognostications. Odds are, each one you hear is a little different than the last.
And that’s the point of this article. You have to be careful when listening to 2020 market predictions. For the most part, it’s best to ignore them as much as you can.
It can be tempting to follow these predictions, but that’s all they are. They are just educated guesses on what will happen. The stock market is extremely complex. There are a lot of moving parts and things that occur on a daily basis. There are too many ebbs, flows and variables to effectively predict exactly what will happen in the next year.
Take 2019 for example. Nobody back in 2018 properly forecasted the trade war with China, impeachment hearings or multiple rate cuts by the Federal Reserve—all of which have dramatically affected the stock market in the opposite way that most everyone expected. Things literally change every single day, so it’s nearly impossible to guess what the market is going to look like in another year’s time.
There are trends you can study and patterns that emerge as the year goes on. This is what makes a successful investor – one that models success. Basing your 2020 investment plan purely on what a TV commentator says or what’s written in an investment publiation in 2019 is a foolish strategy.
Seriously, how often do the sports teams with the best odds at the beginning of the season actually make the playoffs or win the actual championship? The Cleveland Browns were all the hype this year. No matter which sport you watch, there are always Cinderella stories that come out of nowhere and preseason favorites that end up failing miserably. Injuries, weather and scheduling are just some factors that can shape a team’s season. The most successful investors take things day by day and week by week to make informed decisions, and they still can’t accurately predict every single outcome.
To be a successful investor, you have to have an investment plan and remained disciplined. Your investments are there to help you build your life. The TV commentator or your friend at the holiday party aren’t dialed in to your goals and personalized investment needs. You need to work with a knowledgeable investment advisor who can help you effectively manage your portfolio throughout all market cycles. Don’t take any future market predictions too seriously. Do your own homework and make smart investment decisions for your financial situation.
Illumination Wealth is here to help with your wealth management and investment strategies for 2020 and beyond. We know what it takes to make wise moves no matter what is happening in the market, and we’ll provide you with support, guidance and resources to achieve your long-term financial goals. Contact Illumination Wealth today for a no-obligation consultation.