Conflicting Predictions for 2018 And How You Can Make Sense Of It All

It’s that time of the year where financial expects make fools of themselves. Yes, it’s time for the 2018 predictions. What you really need to understand about these predictions, regardless of whether they’re positive or negative, is that they are complete and utter nonsense.


What you really need to understand about these predictions, regardless of whether they’re positive or negative, is that they are complete and utter nonsense.


Take a look at last year’s prediction in retrospect. Everyone’s predictions last year said that since Trump won the election the market would tank, but that didn’t happen. The market is thriving. The SMP is up 19% this year. Even outlets that are typically not in Trump’s favor, such as the New York Times and the Wall Street Journal have come out with articles saying the market is the best it’s been in a long time.

This year, we’re getting two polar opposite predictions: that the market will thrive or the market will be devastated. Maria Bartiromo from Fox News even went as far as to say that since the Tax Bill has passed, we can expect the market to double in 2018. I’ve had clients come to me, even those who dislike Trump, wanting to be aggressive in their investments on the assumption that the economy will continue to thrive based on these predictions. 

On the opposite end of the spectrum we have people like John Malden, a well known financial expert and blogger. He published a prediction saying that there’s overwhelming evidence the stock market is heading for disaster. It’s only a matter of time and that there “Will be blood in the streets.” Obviously, this is an extreme, but it’s something people are trusting as financial advice for next year.


Obviously, this is an extreme, but it’s something people are trusting as financial advice for next year.


The truth of the matter is that absolutely no one knows what the market will do in 2018. Don’t create an investment strategy based on this nonsense. So what should you base your strategy on?

If you’re trying build a strategy for your investments in 2018, base it on the question “What can I afford to lose?” If you’re near retirement you can’t afford to lose much because you’ll be depending on that money soon. If you’re younger and have some time to bounce back, you may be able to invest more. It really matters where you are in your journey to retirement. Once you know your risk tolerance, you are ready to walk into next year no matter what. If everything goes well, you’ll going to do really well. If the market drops, it’s not going to be devastating for you because you already have a plan.


Once you know your risk tolerance, you are ready to walk into next year no matter what.


The really fun part of my job is meeting so many different people and helping them tailor a plan to reach their dream for the future.

 

I can help you make a plan to be successful regardless of the market. It’s not just about your investments in the next year, but your entire future.