{"id":5271,"date":"2025-01-14T12:11:16","date_gmt":"2025-01-14T01:41:16","guid":{"rendered":"https:\/\/strawman.com\/blog\/?p=5271"},"modified":"2025-01-24T12:12:16","modified_gmt":"2025-01-24T01:42:16","slug":"2025-market-outlook","status":"publish","type":"post","link":"https:\/\/strawman.com\/blog\/2025-market-outlook\/","title":{"rendered":"2025 Market Outlook"},"content":{"rendered":"\n

This time last year, the big names in finance were practically shrugging at the Aussie market\u2019s prospects for 2024.<\/p>\n\n\n\n

AMP predicted a modest 4% gain, with the RBA supposedly cutting rates from 4.35% to 3.6% to keep things afloat. UBS said the ASX200 would end the year right where it started. ANZ forecasted “mid-single-digit returns with risks skewed to the downside.” And Vanguard\u2019s crystal ball? About 5% growth.<\/p>\n\n\n\n

Turns out, the ASX200 laughed in their faces and delivered a double-digit total return, brushing against record highs. <\/p>\n\n\n\n

I\u2019m not just cherry-picking these misses to dunk on the experts. Study after study has shown that analyst forecasts, while dressed in shiny graphs and serious jargon, often miss the mark. What’s more, major market turning points are almost always missed, with forecasters usually just extrapolating recent trends. <\/p>\n\n\n\n

And it\u2019s not just equity analysts who struggle to see the future. Back in 2012, the RBA commissioned a study on the accuracy of its economic forecasts. You’d think with around 400 highly trained economists on the payroll they might fare better…but you’d be wrong.<\/p>\n\n\n\n

According to the discussion paper by Peter Tulip and Stephanie Wallace the RBA’s forecasts “lack explanatory power,” and that at longer horizons, its inflation forecasts are no more accurate than assuming inflation will revert to the midpoint of the target range.<\/p>\n\n\n\n

Given the conclusion, it is perhaps unsurprising I couldn’t find a more up to date reflection from our central bank.<\/p>\n\n\n\n

I could go on and on (I really could), but you get the point. Moreover, there’s little point in trying to shame our modern day soothsayers — they do a good enough job of that themselves.<\/p>\n\n\n\n

As Plato reminds us, wise men speak because they have something to say; fools because they have to say something.<\/em><\/p>\n\n\n\n

No, if there’s anyone to blame for our slavish obsession with short-term forecasting it’s ourselves. The reason the pundits provide forecasts is, well, because we keep asking them to. When the ducks quack, feed ’em!<\/p>\n\n\n\n

So, what\u2019s the takeaway here? If you need an outlook for 2025, let me offer you this timeless gem from J.P. Morgan himself:<\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

Simple, brilliant, and still undefeated.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Strawman is Australia\u2019s premier online investment club.
Members share research & recommendations on ASX-listed stocks by managing Virtual Portfolios and building Company Reports. By ranking content according to performance and community endorsement, Strawman provides accountable and peer-reviewed investment insights. <\/em><\/p>\n\n\n\n

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This time last year, the big names in finance were practically shrugging at the Aussie market\u2019s prospects for 2024. AMP predicted a modest 4% gain, with the RBA supposedly cutting rates from 4.35% to 3.6% to keep things afloat. UBS said the ASX200 would end the year right where it started. ANZ forecasted “mid-single-digit returns with risks skewed to the downside.” […]<\/p>\n","protected":false},"author":5,"featured_media":5272,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5271","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"yoast_head":"\n2025 Market Outlook - Strawman Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/strawman.com\/blog\/2025-market-outlook\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2025 Market Outlook - Strawman Blog\" \/>\n<meta property=\"og:description\" content=\"This time last year, the big names in finance were practically shrugging at the Aussie market\u2019s prospects for 2024. 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