This will conclude my not-so-scientific monthly stock market predictions experiment. After bouncing the whole year around, over, and under the statistically meaningless 50% mark I am sufficiently convinced that I indeed have no magical insight into short-term market movements. Truth be told, I also felt a bit stupid making these prediction posts in the beginning of every month.
But one should never let a failed experiment go to waste. Instead of making inane monthly predictions, I will switch to making inane yearly ones! This change will increase my predictive productivity roughly 12-fold and will hopefully make for a fun let's-see-how-I-did post at the end of 2013.
As before, please don't take this prediction business too seriously. More accurately, don't take it seriously at all. But if you, like me, occasionally think that you really might have that exceedingly rare gift of profitable market-timing, then you owe it to yourself to put it to the test by making and keeping track of your own predictions. After several dozen predictions you will have a decent indicator of whether you are a market genius (say, over 80% accuracy), a monkey throwing darts (20-80% accuracy), or need to channel your inner George Costanza and start doing the opposite of what your gut tells you (under 20% accuracy). Just don't jump to any conclusions after getting your first couple predictions right (or wrong).
And now, on to my bold 2013 predictions! After including -- but, for simplicity, not compounding -- all interest and dividends I predict:
- S&P 500 stocks, as represented by Vanguard mutual fund VFINX, to lose 3% in 2013
- EAFE stocks, as represented by Vanguard mutual fund VDMIX, to gain 8%
- Emerging markets stocks, as represented by Vanguard fund VEIEX, to gain 5%
- US REITs, as represented by Vanguard mutual fund VGSIX, to lose 19%
- US total bond market, as represented by Vanguard mutual fund VBMFX, to lose 4%
- US long-term treasuries, as represented by Vanguard mutual fund VUSTX, to lose 12%
- US long-term corporate bonds, as represented by Vanguard mutual fund VWESX, to lose 3%
- Gold, as represented by ETF GLD, to lose 14%
Happy, healthy, and prosperous 2013 to all!