Jeff Sommer pans the Wall Street experts who forecast the stock market, here…
“It would be unfair to highlight the forecasts for this bizarre year if the record in the past had been impressive, but that just isn’t the case.
Such wildly incorrect predictions have been the norm since 2000, I found, after reviewing the median annual stock predictions made by Wall Street analysts each December. Paul Hickey, a co-founder of Bespoke Investment Group, updated data that he compiled last year.
The numbers show that since 2000, the median Wall Street analyst forecast that the S&P 500 would rise 9.5 percent a year, on average. In reality, the annual increase averaged 6 percent a year.
That 3.5 percentage point gap, or spread, is considerable in itself, but a closer look shows that it vastly understates how terrible the invariably bullish forecasts were.
Each December, since 2000, the median forecast never called for a stock market decline over the course of the following calendar year. But the market did fall in six separate years in that period, or about 29 percent of the time. (That’s roughly in line with the long-term stock market average: Vanguard has found that from 1926 through 2019, the stock market fell in 27 percent of calendar years.)”
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