Tea leaves, crystal balls, Tarot cards … almost anything might be as effective at predicting future economic conditions as the so-called investment “experts.”
Supernatural nonsense aside, it’s hard to put much faith in “expert” investment forecasts, especially considering the data put forth in this Statement article by Towson University’s Seth Hammer, CPA, Ph.D. Still, many CPAs will eventually find themselves face-to-face with clients who want to reallocate their investment portfolios based on the latest buzz from Wall Street.
“Certainly, practitioners can expect that some clients will not be immune from the lure of the latest hot ‘expert’ predictions, whether arising through television, magazine or other medium,” writes Hammer. “Practitioners may, however, serve to counter the potential damage of media-induced ‘buzz’ and safeguard their clients by (1) providing their clients with the appropriate factual information and (2) continuing to focus on developing appropriate client-centered asset allocation strategies (e.g., development of a risk-adjusted diversified portfolio).”
What’s the most dubious investment forecast you’ve ever heard?