Forecasting is for Fools

The business news networks are full of so-called experts who attempt to forecast the markets. As John Kenneth Galbraith once said: “When it comes to the stock market, there are two kinds of investors: those who do not know where it is going and those who do not know that they do not know where it is going.” For example, the August 14, 2000 issue of Fortune magazine had an article called “10 Stocks to Last the Decade.”* See the list below and how the stocks did.

Basically over a 74% loss in the portfolio with three bankruptcies and not a single winner. This is why we use our rules-based trend-following system known as WealthProtect**. While no strategy can assure success or protect against a loss, we believe trend-following works better than forecasting or just holding on throughout a bear market. See our recent White Paper on Trend Following.

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