No Load Fund/ETF Investing: Opinions On Future Market Direction

To me, the interesting thing about reading forecasts is that nobody seems to agree on the direction of the market. Despite the fact that everyone has the same information available, opinions vary and many times are opposite of each other. That’s a dead giveaway of the value of a forecast, which is zero.

Nevertheless, I read some of them strictly for entertainment.

While I actually may agree with some of the views expressed, they never ever form the basis of my investment decisions. MarketWatch had a recent blurb called “Still a lot of chances to buy upward mobility,” which featured an interview with Donald Hodges, co-manager of the Hodges fund.

His opinion was that “that the stock market will remain stronger than many observers seem to think, and that there are days with severe reactions, but that’s more typical of a strong market than of a real bad one. The bad markets we have been through are the ones that roll over and just get you every day.”

I can agree with that.

The article ends with an opinion from Eugene Sit, chairman of Sit Investment Associates, who says that “he expects stocks to suffer a short-term downturn — in the neighborhood of 5% — before a year-end rally allows the market to finish the year about 3% higher than it was at the halfway point.”

I can agree with that too.

Here you have two somewhat different opinions similar to what you might read daily in any of the media. Unfortunately, many investors use these as a basis for making their investment decisions, and that’s the problem. It’s just an opinion, which you can agree with or not, but that’s it.

This is the exact reason why I never state a view as to where I think the market is headed, although I get many requests from readers who seem to think I have some mysterious power to look into the future.

I track trends and deal with facts; not what might be happening or what I want to happen, but strictly what the numbers tell me “is happening.” If you can get away from overindulging and participating in the (for the most part useless) daily news barrage, you might find yourself looking at facts rather that predictions, which are a far better basis for making more appropriate investment decisions.