reliable sources for market forecasts

[palomalou]

What are reliable sources for market forecasts? I know one cannot time, but how I wish we'd scraped off profits when we were up 27% rather than sitting having lost that plus another 2% (on stocks, not whole portfolio).
Reading yesterday that the market is to fall until 2017 and not return to 2010 levels until 2027
protect-young-investors-from-baby-boom-bust-reuters: Personal Finance News from Yahoo! Finance
leaves me both depressed and bewildered. Depression easy to figure out--more years working current job--but bewildered because I have no way to evaluate such info. Could be true, could be total bologna. Where do you suggest to get sober, perhaps not totally reliable (who knows the future?) but no-axe-to-grind info?

[youbet]

Educate yourself on the basics of economics and finanace. Read, watch and listen to a wide variety of sources of economic and financial current events. Then, make your own decision as to where YOU think the markets will go.

After this doesn't work for ya........ Learn about diversified portfolios, build one and hang on.

[palomalou]

After this doesn't work for ya........ Learn about diversified portfolios, build one and hang on.[/QUOTE]

Did that part.
My problem is, when things aren't going so well I feel compelled to work harder.

[youbet]

Quote:

Originally Posted by palomalou Did that part. My problem is, when things aren't going so well I feel compelled to work harder.

That's likely a bit of a problem for all of us.

Take a look at the output graphs from some assorted FireCalc runs. Note that even portfolios that are destined to survive 100% of the time usually have scary dips and breath-taking climbs. Note too, that more conservative portfolios, although the distribution of results is tighter, have higher failure rates if the equity percentage is too low.

I still get nervous with market volatility, but I've finally convinced myself that volatility is the norm and try to grin and bear it.

I do subscribe to a market timing newsletter but can't say I've ever made any large moves because of advise given there.

[Animorph]

As far as market predictions over periods of weeks, I wouldn't believe anyone trying to predict the markets.

As for economic predictions over the next year or so, I have found some success with the latest 2007 - 2011 dips. I was just learning in 2001, so no record other than investing during the bottom for that drop. I pulled significant amounts (30+%) out of equities in early 2007 (when I retired) just to watch the markets go up 10% before finally tanking. I was also able to pull a good amount (10+%) out of equities in 2011 as the market peaked. It wasn't too hard to see these big problems ahead, though the exact timing and the market's response is a whole other story.

The next problem is when to get back in. I don't know. I just add something like 20% of my free cash back into equities for every 5% to 10% market drop from the peak, very mechanical. Depends on how deep I think the market might fall. So if the market continues down I can buy more, if it goes back up I was able to purchase some shares at a reduced price. If you feel excited about investing in equities after they've dropped 40% and show no signs of heading back up then this is a strategy your might like. I do.

I think I'd be happy if I hit the peak within 15% and the bottom within 15%. Obviously this is not something you want to do if it's just a 20% dip, you might end up losing money over simply holding equities if you didn't call the top and bottom pretty closely. Not something I'd put more than 50% of my equity investments into either, partly due to risk and partly due to logistics and costs. You might also consider temporary hedges like bear market funds or gold or inverse-market ETF's. I've only done the first two. That way you can take a smaller amount of cash out but still get a bigger effect.

If you don't want to do something like that, consider just rebalancing when you think the market has hit bottom (and at peaks). You'll see some gain from that and risk much less. It seemed to me that many people had difficulty with that during 2008 and 2009, not willing to increase equity holdings as they dropped.

[Chuckanut]

Quote:

Originally Posted by palomalou Reading yesterday that the market is to fall until 2017 and not return to 2010 levels until 2027

How does the writer know this? Did he or she given any facts, academic studies or other evidence to support this claim? Past performance does not necessarily predict the future if I recall correctly. So, I ask again: How does the writer KNOW this?

[Chuckanut]

For what it is worth, in the 70's we were all fearing Global Cooling. Rememver that? Canada would stop producing any food to export. The USA would only produce enought for its own population, etc.....

Oh, and remember the social unrest of the 60's and 70's? There would be chaos in the cities of the nation by the 80's. Get you gun, food and gold, and go hide out in some rural area, the cities were doomed.

[JPatrick]

I predict tomorrow will bring a nice snap-back rally.

[REWahoo]

Quote:

Originally Posted by JPatrick I predict tomorrow will bring a nice snap-back rally.

I predict tomorrow will be Monday...

[JPatrick]

Quote:

Originally Posted by REWahoo I predict tomorrow will be Monday...

What's that song??
Another 100 Degree Monday, da, da, da..

[Meadbh]

I hear that crystal balls are quite good.....

[W2R]

Quote:

Originally Posted by Meadbh I hear that crystal balls are quite good.....

Yes, my crystal ball is almost as good as a magic 8-ball.... look deep into it and you will see many mysteries.

[TN_INVEST]

When I was born, the Dow Jones Industrial average was just a few hundred points. Last week, it was over ten-thousand.

My prediction is that the stock market will continue on this upward "trend."

[MichaelB]

Quote:

Originally Posted by Meadbh I hear that crystal balls are quite good.....

Must resist temptation...

[rescueme]

Quote:

Originally Posted by palomalou What are reliable sources for market forecasts?

IMHO, there are none.

Forecasts are built upon images in the rear-view mirror. You can say, with certainty what was - not what will be (except for death and taxes ).

As for myself/DW? We invest broad-based, against all sectors and countries. It's a bit like being at the roulette table (for those that ever played) and you split your bet against red/black, four numbers, or columns.

The "sucker bet" is the direct bet. While paying 36-1, it's a rare occurance and only should be "played" with chips you are willing to loose.

Heck, gold (the next "best investment") dropped over 10% in the last three days. Our (broad based) investments did much better.

[JPatrick]

Quote:

Originally Posted by Meadbh I hear that crystal balls are quite good.....

Not with our winters.....

[REWahoo]

Quote:

Originally Posted by JPatrick Not with our winters.....

Remember weatherman Jud Ashmore's warnings to viewers on cold nights to "bring in your brass monkeys"?

[JPatrick]

Quote:

Originally Posted by REWahoo Remember weatherman Jud Ashmore's warnings to viewers on cold nights to "bring in your brass monkeys"?

I remember, but I never understood it until now...

[OrcasIslandBound]

Sometimes, even if a market is completely flat, we can still do o.k. through dividends. Take the following example, while not up to date (it goes only through August 31, 2011, so is too optimistic right now), this example shows how important dividends can be. This is of an IRA over a 5 year period ending August 31, 2011:

[Midpack]

Quote:

Originally Posted by palomalou Could be true, could be total bologna. You got it, true for any predictions. Where do you suggest to get sober, perhaps not totally reliable (who knows the future?) but no-axe-to-grind info? There's no such consistently reliable source. All will get it right sometimes, none will get it right consistently. If there was a good source, they and all their followers would be richer than Bill Gates.

You figure out your risk profile and then AA, manage that, and you're done.

If you're really talented and want to spend a great deal of time at it, you can read the economic and financial tea leaves and make odds on investment moves and hope to be right more often than you're wrong. But you'll still be wrong some percentage of the time. And I'd be surprised if 0.01% of the investing population was actually capable of this. More people do themselves harm trying this, and have to learn the hard way.