It’s that time of the year when fund managers and strategists forecast share market returns for the year ahead. Invariably a positive year is expected (no-one likes a Grinch) based on a number of indicators, be it economic or something a little less scientific say the sign of the zodiac.
In fairness, the fact that the share market tends to rise in the long term probably steers commentators to the upside with their forecast.
The only thing we know with certainty is the longer the time frame the greater likelihood of a positive outcome. Unfortunately, one year is hardly the long term. We suspect monthly performance surveys have conditioned participants into believing so. Sometimes it does feel that way.
The extract above is taken from the paper When fear and greed meet risk, by Matthew Booker, senior portfolio manager, Australian smaller companies, for Schroder.
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