Market Forecasting and Moving to Florida
No, I’m not moving to Florida, but my wife would sure like to have a place there in the winter. Sunny skies, warm weather, sandy beaches, who wouldn’t want to frequent the state? But what about hurricanes and sweltering summers? For those reasons some folks retreat north for a different climate. What does this have to do with Market Forecasting?
Florida is sort of like owning great companies. For the most part it’s a great place to live for the all the reasons above, not to mention no state income or estate taxes! Yes, there are some hot summers and dangerous storms, but it’s hard to beat the good times.
Owning great companies is similar in that over the last many decades profitable companies have continued to innovate their products and services, grown earnings, and increased the value of their capital; that’s great for investors. But, every 5 years or so, their values can drop significantly for a time, not to mention the daily and weekly worries prompted by the media.
Market forecasters try to predict what various markets and investments will do in a given year or over time, sort of like weather forecasters. One such forecaster is Harry Dent. He’s written many books and produced a ton of research about the direction of the financial markets. In 2011 he released a book, The Great Crash Ahead, specifically the book was released on September 20, 2011. On that day the Dow Jones Industrial Average closed at 11,408.66. As of this writing the same average is valued at 43,361.19, which is nearly a 4x increase. While never in a straight line, the Dow has far from crashed!
Market forecasters have an impossible job, predicting the future, and often accentuate the risks over the opportunities. Sound like trying to predict the weather? Consuming too much information from forecasters like Dent can lead investors to bail out of or avoid altogether potentially appreciating assets. Their content leads you to believe that realism means pessimism. But the truth seems more accurately that optimism is the only realism. Keep your good investments, and enjoy the Florida sunshine.
Any opinions are those of Landon Vick and not necessarily those of RJFS or Raymond James. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete; it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decisions.
