How To Forecast The Markets Better Than Wall Street’s Been Doing

Reda Farran

5 months ago4:53 mins

How To Forecast The Markets Better Than Wall Street’s Been Doing

Back in December, JPMorgan predicted that US stocks would gain 5% this year, economists were expecting the 10-year US bond yield to stick around 2%, and Goldman Sachs raised the prospect that bitcoin would hit $100,000. But six months later, US stocks are down 20%, the 10-year yield is at 3%, and bitcoin more than halved to around $21,000. The truth is, the pros on Wall Street have a terrible forecasting record, and all you need to do better is to follow five simple steps inspired by Philip Tetlock’s book Superforecasting.

Step 1: Define what you’re trying to forecast

Imagine you came across a headline that says: “Markets are significantly overvalued and are about to crash”.

First things first, you need to understand what “markets are about to crash” actually means.

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