markets like sports have a playbook

Filtering forecasts

Market Ethos.
16 August 2022.

Investors often look for a playbook, a way to help guide them through times of uncertainty. History is often used to write that playbook. However, markets are just like any sport – rules change, equipment improves, and what worked best in the past may not always apply to the current situation. Playbooks need to be constantly revised but despite changes, any research created to guide investors is really based on two fundamental questions: what will happen, and more importantly, how will the market respond?

There is no shortage of forecasts and inane opinions in the financial media. Just sound smart, maybe say something controversial, and you can get plenty of coverage. Individuals can also be incentivized to make a name for themselves, build their personal brand, and bring more revenue to their firm. Fear drives eyeballs and eyeballs bring in the advertising dollars. Unfortunately, it can be easy to conflate the opinions that get the most coverage with those that are the most precise. Forecasting is difficult, and as history shows, often not accurate, especially when it comes to the stock market.

Related articles

Market Ethos

Yielding to yield

September 25, 2023. Market Ethos. It has not been a very kind September. Market performance may feel like the same dance, but there are key…

2 minute read

Market Ethos

Dividends on sale

September 18, 2023. Market Ethos. Dividends are historically less volatile, with good returns and some preferential tax treatment for Canadian qualified dividends.But what happens if…

2 minute read

Market Ethos

Little trouble in big China matters

August 28, 2023. Market Ethos. China’s equity market and economy have been under pressure of late.

2 minute read