2016: TEN PREDICTIONS TO COUNT ON

 The New Year is a customary time to speculate.  In a digital age, when past forecasts are available online, market and media professionals find it harder to hide their blushes when their financial predictions go awry.  But there are ways around that.

The ignominy that goes with making bold forecasts was highlighted in a recent newspaper article, which listed many bad calls US economists had made about 2015.  These included getting the timing of the

Federal Reserve's interest rate increases wrong, incorrectly calling for a rise in long-term bond yields, and assuming an end to the commodity rout.

For the broad US equity market, 22 strategists polled by the Wall Street Journal estimated an average increase increase for the S&P 500 of 8.2% for 205.  The most optimistic individual forecast was for a rise of 14%.  The least optimistic was 2%.  No one picked a fall  as it turned out, the benchmark ended marginally lower for the year.

It shouldn't be a surprise that if economists can't get the broad variable right, it must be tough for stock analysts to pick winners.  Even a stock like Apple, which for so many years surprised on the upside, disappointed some forecasters last year with a 4.6% decline.

It should be evident by now that setting your investment course based on someone's stock picks or expectations for interest rates, the economy, or currencies is not a viable way of building wealth in the   long term.  Markets have a way of confounding your expectations.   So a better option is to stay broadly diversified  and, with the help of an advisor, set an asset allocation that matches your own risk appetite, goals, and circumstances.

If you insist on following forecasts, here is a list of 10 predictions you can count on coming true in 2016:

1. Markets will go up some of the time and down some of the time.

2. There will be unexpected news.  Some of this will move prices.

3. Acres of newsprint will be devote to the likely path of  interest rates.

4. Acres more will speculate on China's growth outlook.

5.TV pundits will frequently and loudly debate short-term market direction.

6. Some economists will strengthen.  Others will weaken.  These change year to year.

7. Some companies will prosper.  Others will falter.  These change year to year.

8. Parts of your portfolio will do better than other parts.  We don't know which.

9. A new book will say the rules no longer work and everything has changed.

10. Another new book will say nothing has really changed and the old rules still apply.

The future is always uncertain.  There are always unexpected events.  Some will turn out worse than you expect; others will turn out better.  The only sustainable approach to that uncetainty is to focus on what you can control.

In the meantime, let me wish you a Happy New Year to you all!