As the year comes to an end the time has come for every pundit’s economic/stocks predictions for 2010. Next year is especially significant because not only is it the start of the new year but it is the start of the new decade ( although officially the new decade does not begin until 2011). The predictions come from a wide range of people ranging from “experts” on Cnbc and Bloomberg, Government officials, individual bloggers, and average Americans who do not know what GDP means(I am not trying to poke fun at the average American. I am just stating the sad reality).
Honestly, I find it foolish that people are so confident in predicting the future. I do think it’s important for economists and various Government branches to try and forecast future economic conditions. However, it is impossible to accurately forecast the future with precession that so many people claim. I think people have to realize that as humans we have limitations in our ability to forecast the future.
I have read various predictions for the upcoming year. Below are some titles of articles on the topic. There are hundreds of articles on 2010 predictions so I am just listing several of them.
·5 Predictions and 4 Possible Surprises for the New Year
Now I would like to ask how many people predicted on December 31,2008 that the following would happen in 2009
·Oil would reach a low of 34, before finishing the year near $80 a barrel
·Monthly job losses would go from negative 741,000 in January to only negative 11,000 by the end of the year
·The S&P would reach a low of 666 in early March, and rebound to over 1100 by year end
·There were serious discussions of nationalization of all the major banks in the beginning of the year. At year end all the major banks have repaid TARP
There are many other events that very few people predicted would occur, but it is impossible to list all of them. I think the lesson is that while we should make educated guesses as to what the future holds, we have to be careful not to be overconfident.
What is my view, my view is I do not know. Will stocks perform better than bonds next year? Will oil prices go higher? Will the job market improve? I honestly do not know. All I can say when I asked what I think the stock market will do next year is to answer as JP Morgan did “it will fluctuate”.