A 2011
review of market outcomes and the “experts” who failed to predict them.
“Prediction is very difficult, especially if
it's about the future.” - Niels Bohr, Danish physicist
Entering 2011, many investors had great hope in the
world economic recovery. Equity markets
had just tallied two straight years of strong performance, central banks
remained committed to low rates, and major developed countries were working to
resolve debt issues. As would be
expected, pundits were out in full force predicting another great year for
stock investors. A survey conducted by CNNMoney of 32 “experts” found the average
prediction for the 2011 S&P 500 return was 11%. In fact, not one of the experts thought the
S&P 500 would decline.[1] How accurate were they? The
S&P 500 ended exactly flat in price at yearend and eked out a 2.11% return
with reinvested dividends.
