Forget Stock Predictions for Next Year. Focus on the Next Decade.

Instead, embrace uncertainty.

Accept that you need to invest without knowing what will happen to your money over the short term. So be sure, first, to put aside enough money in a safe place, like a bank account or money-market fund, to pay the bills in the months ahead.

But because the stock market tends to rise over long periods, and because bonds are now generating reasonable income (as I explained last week), it’s wise to invest for a horizon of a decade or more in low-cost index funds that track the entire stock and bond markets.

Don’t base your investments on specific predictions of where the stock market is heading over the short term, because nobody knows. Making bets on the basis of these forecasts is gambling, not investing.

The History


Consider how bad Wall Street forecasts have been.

In 2020, I noted that the median Wall Street forecast since 2000 had missed its target by an average 12.9 percentage points a year. That error over two decades was astonishing: more than…

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This article was written by Jeff Sommer and originally published on