If asked "What returns do you expect the market to deliver over the next year?" The correct answer is "We don’t know. At best, we can provide a wide range, such as between -15% and +35%." At this stage people sometimes say, "You are the experts and you are supposed to know."

Most investment market commentators do not want their expertise questioned, so they say many things, of which at least some will be correct. Even if their main prediction turns out to be incorrect, they can start their next commentary with the things that they got right. They can also give good reasons why they were incorrect with some. When measured over longer periods, the forecasts of market experts are indistinguishable from guesswork.

It is impossible to be certain about what will happen in the future. Would anyone have predicted that South Africa would win its last three Rugby World Cup games by one point? However, we must realise that many highly skilled investment professionals around the world, using the same information, have their own view of how things may play out. This is often reflected in the market prices.

Next time you hear a prediction from an investment expert, be aware that their predictions can sometimes be correct, but often they are not.