The 3 Worst Economic Predictions For 2011







We love stock market and economic forecasts!  Not because of their accuracy, but more because of their “inaccuracies”.

Below are 3 forecasts “experts” made for 2011 and the realities of where the markets and economy are today relative to those forecasts.

Mis-Forecast #1: The S&P Will Not Decline in 2011: That’s right; all 32 experts surveyed by CNN Money stated that the S&P 500 will not decline in 2011 and on average expected an 11% return this year.

Reality #1: The S&P 500 is down 5% YTD.  The S&P 500 opened January 3rd at 1,257 and is currently at 1,188.

Mis-Forecast #2: America’s Unemployment Will Improve in 2011:  The reputable Economist stated “2011 should bring a meaningful reduction in American unemployment.”

Reality #2: The unemployment rate has ticked up from 9.0% in January to 9.1% today.

Mis-Forecast #3: Buffet Predicts 2011 Housing Rebound: Even the “Oracle of Omaha” got this one wrong when he said “residential housing problems should largely be behind us” when speaking about the 2011 real estate market.

Reality #3: In August, default notices on U.S. homes reached the biggest level in 4 years and housing prices fell on average 5% from a year ago.

What’s the lesson of the day?  Your own forecasts are probably just as predictable as the experts.  As always, be prepared for anything and don’t buy into the media frenzy.

What predictions do you have for the remainder of 2011?

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