In 1875, an Ohio farmer named Samuel Benner published a chart that claimed to predict the future of financial markets. It was based on the price cycles of cast-iron. One hundred and fifty years later, that same chart – the Benner Chart – still circulates on social media, shared breathlessly by accounts promising it holds the key to knowing when the next crash will come and when the next boom will begin.
Let that sink in. A chart derived from cast-iron prices in the Reconstruction era is being used to make investment decisions in the age of AI and algorithmic trading. That alone should tell you something important about our relationship with financial predictions: we want so badly to believe someone – anyone – can see the future that we will cling to almost anything that promises certainty.
The financial industry, the media, and social media are saturated with forecasts. Year-end S&P 500 targets. Recession calls. Crash predictions. Cycle theories. And the evidence, collected over decades and across thousands of predictions, is overwhelming: these forecasts are no better than coin flips. Acting on them is far more likely to destroy your wealth than to build it.
The Evidence Is In: Forecasters Can’t Forecast
This is not opinion. The data is remarkably clear.
The most comprehensive study of forecasting accuracy was conducted by CXO Advisory Group, which tracked 68 prominent market forecasters over 14 years (1998–2012), evaluating 6,585 individual forecasts. The average accuracy across all forecasters was 48%. That’s worse than flipping a coin! Two-thirds of the forecasters scored below 50%. Even the best performer among those with 100 or more predictions managed only 65% accuracy. Jim Cramer, one of the most recognisable faces in financial media, came in at 46.8% on 62 predictions. CXO stopped collecting data in 2013 because the finding was so conclusive there was nothing left to prove.
An academic re-evaluation by Bailey et al. in 2017 found that when forecasts were weighted by time horizon and specificity, the accuracies generally got even worse.
Philip Tetlock’s landmark study, published in Expert Political Judgment, reached the same conclusion from a different angle. Over 20 years, Tetlock collected 82,361 forecasts from 284 experts and found that expert predictions were no more accurate than random guesses. Worse, the most confident forecasters were the least accurate. Greater expertise and public prestige did not improve results.
None of the survey forecasts managed to beat a simple random walk model. Professional forecasters actually produced worse results than individual investors.
Read that again: the professionals whose job is to predict markets performed worse than people guessing at random.
Wall Street’s Annual Guessing Game
Every December, Wall Street’s top strategists publish their year-end S&P 500 targets. These numbers get headline coverage. They are discussed on financial television for days. Retail investors read them and adjust their portfolios accordingly.
And nearly every year, the targets are wrong – often dramatically so.
In 2025, according to Fortune, strategists had to revise their S&P 500 targets upward repeatedly after markets defied their cautious forecasts. The average year-end forecast lagged the actual market return; only 1999 and 2024 saw bigger misses. Strategists cut their targets in May 2025 amid tariff fears, then raised them again by June when markets surged anyway.
This is not unusual. It happens in some form nearly every year. The targets serve a marketing function as they give firms something to talk about, something to publish, something to sell. Their actual predictive value is statistically indistinguishable from noise.
If the best-resourced analysts in the world, with access to proprietary data, teams of PhDs, and decades of experience, cannot consistently get the direction of the market right for 12 months, what chance does a chart, a newsletter, or a social media thread have?
The Celebrity Crash Predictor Trap
Few figures illustrate the futility of prediction better than the serial crash callers.
Robert Kiyosaki, the author of Rich Dad Poor Dad, has predicted market crashes in 2011, 2015, 2017, 2018, 2020, 2021, 2022, 2023, and 2024. Markets rose after nearly every one of those predictions. His April 2020 declaration that “the crash has begun” coincided almost exactly with the S&P 500’s pandemic bottom: the market then rose 53.4% in the following 12 months.
Michael Burry, made famous by The Big Short for his prescient call on the 2008 housing crisis, has since predicted crashes in 2017, 2019, 2020, 2021, and 2022. The timing on nearly all of them has been off. Being spectacularly right once does not make someone a reliable oracle. And being early, in investing, is indistinguishable from being wrong.
The lesson is not that these individuals are dishonest or unintelligent. The lesson is that markets are complex adaptive systems. No one person, no matter how famous, how confident, or how right they were in the past, can reliably predict what they will do next.
Why We Want to Believe Anyway
If the evidence is this clear, why do forecasts still command so much attention?
Because we are pattern-seeking creatures. The human brain evolved to find order in chaos: to spot the tiger in the tall grass, to predict the seasons, to plan the harvest. That instinct served us well for millennia. But financial markets are not the savanna. Patterns that appear meaningful are often just noise, and the past does not reliably predict the future.
The Benner Chart is a perfect example. It has a loose historical correlation with some market events, enough to feel convincing at a glance. But it cannot specify magnitude, precise timing, or which asset classes it applies to. Its appeal is emotional, not analytical. It gives us a sense of control in a world that stubbornly refuses to be controlled.
This is a cognitive bias, not a market insight. Prediction feels productive. Staying the course feels passive. But the data consistently shows that the “passive” approach of disciplined, diversified, long-term investing wins over time.
What to Do Instead
The alternative to forecasting is not ignorance. It is building a plan that does not depend on predictions:
- Define your asset allocation based on your goals and risk tolerance. Your mix of stocks, bonds, and other assets should reflect your time horizon and how much volatility you can stomach, not what someone thinks the market will do next quarter.
- Invest regularly regardless of headlines. Pay yourself first. Automate your contributions. The discipline of investing a fixed amount on a fixed schedule removes the temptation to time the market.
- Rebalance periodically. When your allocation drifts from your target because one asset class has outperformed or underperformed bring it back in line. This is a mechanical process, not a prediction.
- Ignore forecasts, year-end targets, crash predictions, and cycle charts. They are noise. Treat them as entertainment if you must, but never as the basis for an investment decision.
- Think in decades, not quarters. The returns of a disciplined, diversified investor over 20 or more years have historically been far better than those of any market timer. Time in the market beats timing the market, not because it is a clever saying, but because the data proves it.
This approach is not exciting. It will never make for a viral social media post. But it works. And it works precisely because it does not require you to know the unknowable.
Final Thoughts
Forecasting is not investing. It is entertainment disguised as strategy. The best investors are not the ones who predicted the future correctly. They are the ones who built a portfolio that did not require them to.
- Decades of research show that expert market forecasts are no better than coin flips.
- Wall Street’s year-end targets are marketing tools, not investment tools.
- Celebrity crash predictors like Kiyosaki and Burry have been wrong far more often than they have been right.
- Our desire to believe in predictions is a cognitive bias, not a market edge.
- The disciplined investor’s advantage is not foresight; it is a plan that works in any market environment.
The next time someone shares a chart that “predicts” the market’s future, ask yourself one question: what would I actually do differently if I believed it? If the answer involves selling everything, waiting on the sidelines, or trying to time your entry, then that is not a plan. That is a guess. And the evidence, collected across thousands of predictions and decades of data, says that guessing costs money.