- Goldman Sachs forecasts the S&P 500 to hit 4,000 by the end of 2023 in a best-case scenario.
- Banks missed year-end forecasts by about 25% last year
- Here’s why retail investors should avoid sticking to such predictions.
Yesterday, Goldman Sachs claimed that the .index could go up to 4,000 points for a soft recession scenario and 3,750 points (to 3,150 after the collapse) for a hard recession. increase.
After reading the report, I laughed for two reasons.
- Hysterical people are saying in the comments, “Then you should lighten the stock and keep the cash.”
- The fact that these predictions are almost always wrong.
can’t believe it? So let’s see what Goldman Sachs himself predicted for his same S&P 500 index at the end of 2021.
5100 points by the end of 2022 (the index closes at 3840, essentially about 25% below forecast).
Jonathan Ferro’s Predictions for 2022
Does anyone still believe in market predictions? I’m disappointed. Many investors still don’t realize that big banks and investment funds are playing different games.
In a hyper-competitive world where money moves from one side to the other with a click today, they have to think short-term as profits and accounts are created quarterly (Goldman Sachs’ quarterly ‘s EPS of 3.32 vs. 5.56, net income down 66% YoY, just say).
Individual investors (we), on the other hand, can only afford to think about their own game of long-term investment, diversification, accumulation planning, and achieving life goals.
If you don’t understand this, you’re constantly at the mercy of quirky forecasts, constantly chasing market ups and downs, and falling into confirmation bias.
It’s a never-ending game. Different forecasts, reports, and views come out every day. Just because someone is considered an expert, we think they are better at predicting the future than we are.
Have a laugh with your friends at the bar or use predictions in your WhatsApp group. However, remember that the actions that lead to market outcomes are always the simplest and most trivial, as far as they follow.
Disclosure: I am long in the S&P 500 index. This article is written for informational purposes only. It does not constitute an investment solicitation, proposal, advice or recommendation and is not intended to encourage the purchase of any assets. Remember that any type of asset is evaluated in multiple ways and carries a high degree of risk, so the investment decision and the risks involved rest with the investor.
