“Experts” are sometimes wrong about the markets…

As we are now a little more than half-way through the year, we would like to highlight some of the differences in projections for the S&P 500 index that Wall Street strategists have made for 2018. These projections are often used by investors to gauge the sentiment among the top strategists for the outlook over the next year; however, these strategists and banks are constantly reassessing their projections. The chart below shows the initial projections for the S&P 500 as of December 19, 2017, their current projections for the year-end as of July 5, 2018, and the percentage change the S&P 500 would need to undergo by the end of the year to reach current projections.

S&P 500 projections

S&P 500 at 2817 on July 27, 2018 at 1:22PM

Source: https://www.cnbc.com/market-strategist-survey-cnbc/

Many of these companies also created models to project their World Cup brackets. The World Cup ended recently as France came out victorious against Croatia. England and Belgium rounded out the final four teams. Goldman Sachs predicted Brazil as their winner; UBS predicted Germany as their winner; ING Group predicted Spain as their winner. Brazil lost in the quarterfinals, Spain lost in the round of 16, and Germany didn’t even make out of the Group stage.

Our point is that making projections about the future is nearly impossible to do accurately. Even the top Wall Street strategists and their advanced models have a high probability of being wrong—even with something as straightforward as soccer. Because no one can perfectly predict what markets will do, we believe it is important to continue investing your money and have some downside protection in your portfolio in case these bullish projections miss the mark. To learn more about how we provide downside protection in your portfolio, contact one of our advisors today!




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