It’s that time of year again. No, we’re not talking about the holiday season, we’re talking about the prediction season. And, just as Christmas decorations seem to appear earlier and earlier in stores, predictions for 2020 are already appearing in newsstands.

As usual, the media will likely report on several diverse topics. For 2020, most predication stories will cover some combination, or all, of the following: U.S. presidential elections, U.S. trade negotiations, impeachment proceedings, U.S. and global interest rates, and whether the U.S. and/or world will enter a recession in 2020.

Just as we’ve experienced in the past, if you spend enough time reading stories, watching investment programs or listening to business radio, you’ll hear two completely different, equally compelling points of view about the same topic. This is our issue with market and economic predictions—they are all based on someone’s opinion or guess about what may or may not happen in the future. Yet they are relayed to us with such conviction that we feel foolish for not agreeing with them.

What are our predictions for 2020? If you’ve been with us long enough, you’ll likely know that we don’t believe in making short-term, forward-looking predictions about the economy, stocks or bonds. We don’t have a crystal ball, and we feel we shouldn’t give too much credit to other predictions because the people who make them lack crystal balls as well. The reality is that the news is random, and since the news heavily influences the direction stocks and bonds go, future stock and bond prices are random.

Although we lack a consistent way to predict what will occur in the economy or market, we do have a prudent process that can help us make informed decisions. That process relies on historical evidence, academic models and common sense. This process was built to help us rise above the noise of the fear-and-greed reporting cycle and focus on the more reliable aspects of investing and financial planning.

So, as you hear predictions for the coming year (both positive and negative), try to keep the points of view in perspective. Those predictions don’t drive markets and those predictions don’t drive the investment process used to manage your savings.

If you have any questions about your investments, need to inform us of family or work-related changes or want to discuss your financial planning needs, please reach out. We are here to help you reach your financial life goals!

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