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10 Significant Trends in Finance

Posted By Barry Ritholtz On January 13, 2013 @ 11:00 am In Finance,Investing | Comments Disabled

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My Sunday Washington Post Business Section column is out, and its a doozy: Rather than do the usual forecasts for the new year silliness, I thought it might be interesting to look instead at the major trends driving the world of finance.

Its called 10 trends to watch in finance for 2013 [2], and the concept behind it is that most people are so busy guessing what might happen in the future, they forget to understand what is happening right now.

My position is understanding precisely what just occurred is much more important than guessing about the future:

“It’s a winter ritual: Seers, prognosticators and other gurus tell us which stocks to buy for the year ahead, where they think the Dow will close in December and which momentous events will take place.

History teaches us that the majority of these charlatans will be wrong, and the ones who get it right are mostly lucky. If you have been reading my column for any length of time, you know to ignore them. (See 2011’s Forecaster Folly [3].)

When it comes to predictions, I do the following: Note down the forecasts made this month and look back at them in a year. Repeat every year. I use my desktop calendar and an e-mail Web service called Followupthen.com to keep me on track. I started doing this almost a decade ago, and I found it terribly liberating. It will be always be instructive, and, as with the class of 2008 forecasters [4], occasionally hilarious.

Doing this taught me to ignore the forecasts I see or read, as well as to keep the piehole in the middle of my face closed whenever anyone asks me for a forecast. I defer, saying, “I have no idea. No one does.” It is fun to watch the TV anchors’ heads spin like Linda Blair’s in “The Exorcist.”

A better use of your time? Discern what’s happening here and now. It’s been my experience that investors spend so much time worrying about what might come next that they miss what just happened..”>

The rest of the column articulates those 10 trends. (I think this may be my first front-page-of-the-business-section column!)

There are a couple of charts at the Post I pulled together from Bianco research & FRED, but the artwork is really kinda cool:
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click for larger graphic
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Jonathan Bartlett for the Washington Post

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Source:
10 trends to watch in finance for 2013 [2]
Barry Ritholtz
Washington Post January 12 2012
http://www.washingtonpost.com/business/10-trends-to-watch-in-nance-for-2013/2013/01/11/70b7b6c6-5477-11e2-a613-ec8d394535c6_story.html


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2013/01/10-significant-trends-in-finance/

URLs in this post:

[1] Image: http://www.washingtonpost.com/business/10-trends-to-watch-in-nance-for-2013/2013/01/11/70b7b6c6-5477-11e2-a613-ec8d394535c6_print.html

[2] 10 trends to watch in finance for 2013: http://www.washingtonpost.com/business/10-trends-to-watch-in-nance-for-2013/2013/01/11/70b7b6c6-5477-11e2-a613-ec8d394535c6_story.html

[3] Forecaster Folly: http://www.washingtonpost.com/business/investing-in-2012-get-ahead-of-forecaster-folly/2011/12/29/gIQAGx2OQP_story.html

[4] class of 2008 forecasters: http://www.ritholtz.com/blog/2008/12/2008-investment-guides-are-hilarious/

[5] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/01/10-trends.png

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