“Most people overestimate what they can do in one year and underestimate what they can do in ten years.” Bill Gates
As we wrap up another lap of the Earth’s orbital period around the Sun, it is hard not to slip in some reflection and forecasting.
Forecasting is more sport than science in the finance world despite the headlines a convincing forecast creates. Bloomberg quantified the hope and reality of S&P 500 Index Forecasting.
- The average forecast of brokers is for a 9.1% gain in 2025.
- Over the last 25 years, 53% of the 376 firms surveyed clustered between 0 and 10%.
- However, the actual distribution of returns is much more volatile, with only 15% of the last 25 years posting 0-10% returns.
- Over a longer period, large gains and losses were more frequent than single-digit gains, which occurred just 14 times in 97 years.
- 57% of all forecasts analyzed were less than the actual market returns, while 43% proved to be too high.
So, I’m not making any forecasts, but I am anchoring myself to Bill Gates’s comment and will focus on starting a few new things and making some forward progress while not critically watching the hours, weeks, and months pass by. Hopefully, I will be surprised at what I can achieve in time.
To quote the insightful Alan De Botton “Work begins when the fear of doing nothing at all finally trumps the terror of doing it badly.”
If you need more perspective, check out his excellent resources at The School of Life or some of his best one liners.
Support your local Air Ambulance.
One hundred thirty days ago, I fell off my gravel bike in the hills, breaking my femur. I’m back on the bike for the first time post-op. Leaving the hospital on crutches with metalwork in my leg, I was optimistic about my recovery time. It turns out the experts were correct, and my over-optimism is now more aligned with reality. My plan is to surprise myself with what I can achieve in the longer term while doing the recovery work in the short term.
I’m closing out this year with no regrets and high expectations. Onwards.