7 'Sure Thing' Stock Market Predictors Put to the Test

×
Sports IllustratedThere's an old investing adage that says, "As January goes, so goes the year." And this year, the Dow enjoyed a gain of 4.4% in its first month -- auguring a propitious 50% gain in the Dow (had it kept up that performance). Good news, right?

Well, it would have been, except for one thing: common sense.

Had the Dow continued rising at the pace set in January, we would end 2012 with the Dow at 18,000. And with the U.S. in the middle of a stuttering recovery, and much of Europe grinding back toward recession, Dow 18,000 was never very likely.

That's the problem with trusting in market "truisms" like the January theory. When they defy common sense, expecting them to perform as billed is pretty nonsensical. Anyone who bet on Dow 18,000 -- or even the Dow 15,000 implied by the market's course through April -- was bound to be disappointed.

But the January theory isn't the only one suffering from leaky logic. Several other "sure thing" theories, common in investing circles, may not hold water either.




Increase your money and finance knowledge from home

Behavioral Finance

Why do investors make the decisions that they do?

View Course »

Introduction to Economic Indicators

Measure the performance of the economy.

View Course »

Add a Comment

*0 / 3000 Character Maximum

3 Comments

Filter by:
viking9343

I feel a change is a comming...

Jimmy Carter Part Deux is almost through
America will once again rise
When the black cloud of socialism is in complete demise
Obama and the Dems like Pelposi and Reid
Will be sent back to their States
And for the sake of the futher of America, not a minute too late

June 08 2012 at 2:54 PM Report abuse -2 rate up rate down Reply
xbor8

Pretty stupid I think to keep trying to degrade the President by calling him a Muslim! He is prpbably more Christian than I am!

June 08 2012 at 1:52 PM Report abuse +3 rate up rate down Reply
1 reply to xbor8's comment
andrewofkcmo

well you know those wacky republicans they use their twisted.imagination to come up with whatever lie they can think of and hope it sticks,

June 08 2012 at 8:55 PM Report abuse +3 rate up rate down Reply