The 2012 predictions turned out to be surprisingly on track with Obama’s victory, a 13% increase in the S&P 500, and a collapse in the social media sector. If you want to know how to become a better negotiator, study how the Democrats decisively outmaneuvered the Republicans into accepting $1 of spending cuts for every $41 in tax increases to avoid the Fiscal Cliff.
Making predictions is an academic exercise that helps provide a framework for building wealth. It’s important to put your biases aside and make reasonable predictions about the future in order to optimize your asset allocation.
Creating wealth becomes much easier if you can begin to consistently outperform even by a couple percent over the long run. Imagine being so against President Obama that you decided to keep all your wealth in 0.1% interest producing savings accounts rather than invest in stocks. You would have missed out on 10-15% gains!
For 2013, I’m keeping things simple because I really only care about the stock market, the real estate market, and interest rates as it pertains to lower risk investments. My net worth is still split quite evenly between the three. Furthermore, I’d like to offer up some thoughts on a couple popular stocks everybody likes to talk about, as well as highlight my own goals.