Ignore the Economists

CNNMoney just published an excellent article titled Don’t Listen to Recession Forecasters. This is a great article for those investors who believe they can time the market by predicting recessions. As the article suggests, the odds are greatly stacked against this approach. Here are two key points to consider from the article (with my comments):

1) There have been 30 market declines of 15% or more since the Great Depression and only two led to recessions. (When it comes to predicting the economy, tossing a coin has much better odds of success than the market.)

2) One of the problems with many recessions is that they are triggered by unexpected events. Most of those events are really unpredictable. (Times will always be uncertain. As a result, no one knows the future or how the market will perform over the short-term.)