by Bob Stokes
Updated: January 04, 2019
As you probably know, stock market history shows that the main indexes have ended years higher more often than lower.
So, predicting that the stock market will end a given year in positive territory is not what you would call "sticking your neck out."
Indeed, the record shows that in the aggregate, Wall Street pundits have never predicted a down stock market year, at least not in the past century (Bloomberg, Dec. 31):
Wall Street strategists' ... perennial optimism about U.S. equities got bushwhacked by the worst fourth quarter in a decade. [Last] January, the group predicted the S&P 500 would end 2018 [with] an 8 percent gain. Instead, the benchmark index dropped 6 percent.
Big misses when stocks fall are a predictable outcome for strategists, who since the start of the century have never forecast a down year in U.S. equities.
By the same token, those who break from the crowd and make a bearish forecast are often labeled as peddlers of "gloom and doom."
Here's what the April 2018 Elliott Wave Theorist had to say:
At market tops, optimists are the true bearers of "gloom and doom." Heeding them will set you up to be destroyed financially, emotionally and perhaps even physically. ...
Of practical importance is the fact that if the expected bear market does not occur, you will not suffer except by making less money--in safe, interest-bearing instruments--than those who took risks. If the bear market does come to pass, and if you arrange your affairs so that you have survived and prospered, you will be in the extreme minority.
Elliott wave analysis helps you to make portfolio decisions that will place you in that "extreme minority."
Granted, going against the crowd is always hard to do.
Even after the worst December for the stock market since 1931, many pundits are reverting to the default bullish forecast, as this Dec. 31 CNBC headline attests:
Why 2019 could be very good for stocks, after the worst year in a decade
It's possible that 2019 could turn out to be a positive year for stocks.
But, before you make any "buy, sell or hold" decisions, learn what the Elliott wave model is revealing about the stock market's next big move.
You can enjoy unlimited access to our analysis and forecasts for a full 30 days, risk-free. Look below to learn more.
EWI founder Robert Prechter says one of the main reasons is ...
... That too many people make investment decisions based on the news of the day. In other words: They buy on good news and sell on bad news.
This happens especially at major market turns -- the worst time to make the mistake!
Learn what Elliott wave analysis is revealing about the stock market's current juncture, risk-free for 30 days.
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