By ROBIN POWELL
This is the time for New Year predictions, so here’s mine: 2024 will be full of surprises. But please don’t ask me what those surprises will be because I really don’t have a clue.
Who, for example, 12 months ago, expected Aston Villa to win more Premier League points in 2023 than any team except Manchester City? None of the experts did. I’ve been watching them for most of my lifetime, and I certainly didn’t either.
As I explain in my latest article for Timeline, investors pay far too much attention to predictions. Identifying, in advance, the best-performing funds is far harder than predicting sporting winners. Why? Because it’s far harder to distinguish genuine skill from random chance. The evidence tells us, time and again, that it can’t be done with any consistency.
And yet investors, both retail and institutional, continue to pay investment advisers huge sums to try to pick out the winners.
Stop. Wasting. Your. Money.
Happy new Year. Very best wishes for 2024 to TEBI readers everywhere.. and Up the Villa!
It’s that time of year again when the financial commentators look back at the last 12 months and ahead to the next 12 and try to make sense of it all.
Which investments performed best, and which ones the worst? Why did they do so well or so badly? And how do we need to position our portfolios for the year ahead?
It’s human nature to want simple answers to complex questions. We crave a sense of certainty and a sense of control. That’s why we warm to narratives that seem plausible.
Of course, the journalists who write these articles, and the pundits who contribute to them, have their own motivations. For a start, this sort of forecasting is expected of them; it’s seen as part of their job. They no doubt enjoy it too; explaining market trends and predicting future performance is fun and engaging.
But does this annual tradition actually add any value for investors? Will any of the funds the “experts” are tipping now be among the top performers in 2024?
READ THE FULL ARTICLE HERE
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