CXO Advisory Group tracked the market forecasts of investment experts for two years. It looked at 5,000 measurements of more than 60 gurus. It found the overall accuracy of the group based on both raw forecast count and on the average of forecaster accuracies (weighting each individual equally) was 48 percent —which is about what you would expect from tossing a coin. Nobel laureate William Sharpe found that a market timer who switches between 100 percent stocks and 100 percent cash at certain points during the year would have to be right on average 74 percent of the time to successfully beat the market.
It would be prudent to ignore the onslaught of predictions. If a guru turns out to be correct with a prediction, it is most likely attributable to luck and not skill. Intelligent investing that is based on risk appetite, discipline, and balance, does not have to rely on those who think they have the ability to look into the future and predict tomorrow’s news. (Daniel Solin. US News)