As we move into a new year, market predictions abound. They always do. Newspapers, podcasts, investment houses, and social media feeds fill up with confident forecasts about what the coming year will bring. And almost without exception, most of them will be wrong. 2026 will be no different.
A useful reminder of this came from an exercise run by Forbes in early 2025. They asked 34 billionaires how they thought the S&P 500 would perform over the year. If anyone should have insight, resources, and access to information, surely it would be them. And yet, the results were sobering.
The S&P 500 ended 2025 up 16% – an above-average return by historical standards, given that the index has delivered around 10% per year over the past seven decades. It was lower than the exceptional returns of 2023 and 2024, but still a very good year for equity investors.
The billionaires didn’t see it coming. Nearly half believed the market would be flat or down. Another 35% expected positive returns, but only in the single digits. Just 7 out of the 34 – about 21% – correctly anticipated a return in the 10% to 20% range.
If even billionaires and so-called market masters can’t reliably predict what markets will do, what chance does the normal person in the street have?
This is precisely why real wealth is not built by trying to call the next best thing or by reacting to predictions. It is built by staying in the market, through good years and bad, and by allowing time and compounding to do the heavy lifting.
This is also why your investment strategy should never exist in isolation. It should be built after – or at least alongside – a proper personal financial plan. The plan defines what you are trying to achieve. The investments are simply the tools used to get you there.
In our experience, the simpler the investment strategy, the better. Complexity rarely improves outcomes, but it almost always increases the chance of poor behaviour at the wrong time. The best investment strategy is not the most exciting or sophisticated one. It is the one you understand, believe in, and will actually stick to when markets become uncomfortable.
Predictions will keep coming. They always do. The discipline to ignore them is one of the greatest advantages an investor can have.
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Dirk Groeneveld, Certified Financial Planner
t. 083 261 9287
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- Previous Columns:
- How Many Good Summers Do You Have Left?
- Change From Spending on Stuff to Spending on Memories
- Retire With A Plan. Then Tear It Up.
- It May Be Time to Reconsider What Retirement Means to You
- We Love A Sale, Except When Investing
- The difference between saving and investing
- Where is our focus?
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