The folly of forecasting models–Just how accurate are they?
2 Comments
Vanguard Group carried out a study on how accurate some of the common market direction indicators are and the results are interesting.
Vanguard’s bias is that they are a non profit organization that sells the concept that markets cannot be timed and the best way is to keep expenses low and be in the market,.
However, it is interesting to see that 1 year returns cannot be accurately predicted and 10 years return wise, Price Earnings of the market seem to be the way to go.
Still, even price earnings didn’t edge higher than 0.50 proportion of variance which indicates the reliability of these models.
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Drizzt
Thursday 27th of December 2012
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Andrew L
Thursday 27th of December 2012
Hi Drizzt,
i enjoy reading your blogs. You have prepared a very good dividen tracker but unfortunately you are not update it nightly as what you will like to do it.
Just a feedback- your reader and follower
Drizzt
Thursday 27th of December 2012
Thanks Andrew for the feedback. I try to do it everyday but there are days where i just forgot to do it.