The inauguration of Donald Trump brings with it a lot of uncertainty, so it’s not surprising that a lot of people are speculating about the future and what it means for investing. In the past week, I’ve read articles predicting significant growth in the U.S. markets during the next year and others advising people to move their money to cash and gold as quickly as possible.

Here’s the conundrum when you rely on predictions to drive your investing decisions: when there are so many conflicting forecasts, which one do you trust?

If you think bank economists, newspaper columnists or TV commentators have any special expertise about predicting the future, remember it was only a year ago that the Bank of Scotland and many others were forecasting a disastrous year on the markets. “Sell everything except high quality bonds,” the bank’s economists wrote, suggesting the markets could drop by as much as 20%.

For a short time, it looked like they might be right. In January 2016, the markets were down significantly. But by the end of the year, the S&P was up 12% and the TSX was up 18%.

So if economists or financial gurus tell you now that the markets are going to go down – or up, for that matter – why would you believe them?


The views of the author are his alone and may not represent the views of PWL Capital. Any data, information and content on this blog is for information purposes only and should not be construed as an offer of advisory services. Mark Sutcliffe is not regulated by Investment Industry Regulatory Organization of Canada (IIROC), nor a member of the Canadian Investor Protection Fund (CIPF).